NICOSIA, Cyprus – International credit rating agency DBRS Morningstar has revised its economic growth forecast for Cyprus upward, signaling improved confidence in the Mediterranean nation’s economic resilience. The agency now projects stronger GDP expansion for 2024 than previously anticipated, according to financial sector sources familiar with the report.
The upgraded forecast reflects Cyprus’s continued recovery from economic challenges in recent years, with the tourism sector demonstrating particular strength during the current year. Analysts note that service exports and real estate activity have contributed to the positive momentum, despite ongoing pressures from inflation and regional geopolitical uncertainties.
“The revision suggests that Cyprus’s economy is navigating global headwinds more effectively than some regional counterparts,” said a financial analyst specializing in European markets, who spoke on condition of anonymity ahead of the official report publication. “DBRS tends to be conservative in its assessments, so an upward revision carries significant weight.”
Cyprus has maintained steady growth since recovering from the 2013 financial crisis that required an international bailout. The country’s GDP expanded by approximately 2.5% in 2023, according to Eurostat data, with preliminary indicators suggesting continued moderate growth into 2024.
Government officials have pointed to diversified economic development, including technology sector investments and shipping registry expansions, as contributing factors to economic stability. However, economists caution that Cyprus remains vulnerable to external shocks due to its small, open economy and continuing banking sector challenges from non-performing loans.
Looking forward, the improved forecast could influence investor sentiment toward Cypriot bonds and potentially support further credit rating assessments. Market observers will monitor whether other major rating agencies follow DBRS’s more optimistic outlook when they next review Cyprus’s sovereign credit rating in the coming months.