Cyprus stands out among the few countries projected to record substantial fiscal improvement in the coming year, according to Moody’s Global Sovereign Outlook 2026. The international rating agency highlights Cyprus (A3 stable) as a resilient economy, maintaining a steady downward trajectory in public debt and a continued strengthening of its fiscal indicators.

Moody’s notes that Cyprus, along with Ireland, is among the examples of countries demonstrating consistent debt reduction and long-term fiscal discipline. The agency attributes this performance to a decade of structural reforms that have reinforced the island’s financial foundations, improved budgetary management, and boosted investor confidence.

The report underscores that most sovereigns will maintain primary balances at post-pandemic highs, leaving debt ratios elevated.

Moody’s projects moderate global growth over the next two years, estimating expansion between 2.5% and 2.6% for 2026–2027. Emerging markets are expected to grow around 4%, while advanced economies are likely to hover near 1.5% annually.

The report also points to ongoing risks such as geopolitical tensions, trade disruptions, and divergent monetary policies, which could affect growth prospects.