Cyprus strategically issued a 7year bond, raising €1 billion amidst favorable market conditions and recent credit rating upgrades. With €9.6 billion in offers, the move showcased Cyprus’ commitment to reducing debt and maintaining a strong market presence.
Cyprus strategically accumulated €2.83 billion in cash reserves to cover 132% of nearterm debt, leading to a notable €740 million debt reduction and net debt at 68% of GDP. The PDMO’s issuance of benchmark bonds and investments from the Social Insurance Fund further solidified the nation’s fiscal resilience against global economic uncertainty.
Cyprus’ economic resilience shines as the IMF predicts a speedier decline in public debt, reaching the 60 percent threshold by 2026 a year ahead of schedule. Strong indicators such as a healthy primary surplus and rising GDP contribute to Cyprus’ fiscal strength amid global uncertainties.
The state budget deficit in Cyprus surged to €980 million in 2023, a significant increase from the previous year. This rise was driven by higher expenditures surpassing revenues, with total expenses hitting €9.17 billion against revenues of €8.72 billion.
In 2023, Cyprus’s central government debt decreased by €689 million, marking a 3% reduction from the previous year, with the total debt standing at €22.4 billion. This fiscal improvement was driven by the repayment of domestic bonds and a strategic approach towards sustainable financing, including the issuance of green and social bonds. The Republic of Cyprus showcased a remarkable fiscal turnaround in 2023, with the central government debt decreasing significantly, setting the stage for economic recovery postpandemic and boosting confidence among investors and international financial entities.
Cyprus is set to witness a significant reduction in its public debt by the end of 2024, with a projected 30 percent decrease in the debttoGDP ratio. The European Commission has praised Cyprus for its fiscal discipline and expects the country to achieve a structural surplus and maintain economic stability through prudent fiscal management.
