Exciting news for the Republic of Cyprus as Morningstar DBRS has affirmed its credit rating at BBB (high) and upgraded its outlook to “Positive.” The Canadian-based rating agency cited improving public debt metrics as a key factor in the decision.

With the general government debt-to-GDP ratio on a downward trend and forecasted to reduce further, the outlook appears optimistic. Strong growth, fiscal surpluses, and robust private consumption are expected to drive economic well-being.

While governance indicators may have weakened, EU membership serves as a stabilizing factor. However, the small size of the service-driven economy remains a vulnerability to external shocks.