International Rating Agency, Scope, announced it completed the periodic review for Cyprus, noting that the review has resulted in no rating action.

Scope announced May 10 as one of the dates for potential credit rating for Cyprus this year. In its latest rating for Cyprus in November last year, Scope upgraded the island’s long-term credit rating to BBB+ with a stable outlook.

In a press release, the Germany-based rating agency stated that Cyprus’ long-term credit ratings of BBB+ are underpinned by the country’s solid economic fundamentals and strong growth potential with one of the highest growth rates in the euro area; a solid fiscal consolidation trajectory and commitment to structural reform; and sustained improvements in the financial sector.

The agency estimates that economic activity should remain robust with a projected real GDP growth rate of 2.8% in 2024, against 2.5% in 2023, whereas real GDP growth is projected to stabilise at 3.0%, in line with the country’s growth potential.

Scope, however noted that Cyprus’ ratings are challenged by: a small, open, and externally dependent economy; lingering albeit improving vulnerabilities in the banking sector, as reflected in still elevated non-performing exposures; and high sensitivity to shocks due to large macro-economic imbalances, reflected in high levels of private and public debt, combined with a weak external position.

The second scheduled date for a potential rating is scheduled for October 25.