FITCH Ratings revised its outlook and Standard & Poor’s Ratings Services lifted its rating on Cyprus.
Both agencies cited the country’s progress under the reform program supported by the European Union and International Monetary Fund, as well as better-than-expected economic performance.
Fitch revised its outlook on the country to stable from negative. The ratings agency said Cyprus’ adherence to the EU-IMF program has helped lower both public and private-sector wages. With concurrent price decreases, this contrasts from earlier episodes of recession.
The agency also said the country exceeded fiscal targets by “a significant margin,” and that the economy “has proved more resilient than previously expected,” according the report.
S&P said it raised its rating on Cyprus one notch to B from B-, which is still considered a so-called speculative rating within junk territory.
The ratings agency noted that Cyprus’ “resilient” tourism and business sectors, and the relative buoyancy of private-sector consumer spending helped the country achieve better-than-expected financial performance. S&P did warn that an escalation of EU sanctions against Russia coupled with a decline in the rouble would hurt Cyprus’ tourism industry.