The Government, in view of the challenges it has to face from developments in the international economic and political environment, will continue to support the economy ”in a responsible and flexible manner” Finance Minister Makis Keravnos says in a written statement on Saturday, following new Morningstar DBRS ratings which confirmed Cyprus’ Long-Term Foreign and Local Currency – Issuer Ratings at BBB (high) and changes to positive from stable the trend on the Long-Term ratings.
Keravnos notes that the Government will continue to support the economy, in terms of growth and employment, as well as public finances, promoting economic plans which will allow the maximum possible utilization of all the opportunities offered for continuous growth of the economy while reducing the public debt.
The Minister notes that Morningstar DBRS based its decision to upgrade the outlook to positive on the reduction in public debt which is expected to continue in the coming years. ”The general government debt-to-GDP ratio fe
ll from 99.3% in 2021 to 77.4% in 2023 and the . The European Commission forecasts that general government debt will further decline to 65.4% of GDP in 2025 due to strong economic growth and fiscal surpluses”, FinMin says.
Keravnos points out that DBRS says that economic growth in Cyprus is likely to continue to benefit from strong private consumption, rising services exports and robust construction investment in the coming years and predicts that the growth rate in Cyprus will increase by 2.9% in 2024 and 2025, compared to the 1.1% growth rate in the Eurozone.
”Favorable developments in growth and employment, in turn, are expected to boost tax revenues and social security contributions. Strong revenue growth has been a key driver of fiscal surpluses in recent years”, the written statement reads.
Keravnos also says that Morningstar DBRS believes that public finances are likely to continue to benefit from strong, albeit decelerating, revenue growth, which will offset modest spending pressures from rising
government wages, spending related to the aging and development of the “rent vs installment” scheme.
Source: Cyprus News Agency