Morningstar DBRS upgraded Cyprus's credit outlook from stable to positive in 2026 while affirming the country's credit rating at A. ^[1] Morningstar DBRS published a commentary asserting that economic convergence is expected to continue across several medium-income European economies. ^[2] Morningstar DBRS projects Cyprus's public debt-to-GDP ratio will fall from 49.9% in 2026 to below 40% by 2029. ^[3] Morningstar DBRS said the positive outlook reflects its expectation that Cyprus will maintain a strong fiscal position and continue reducing public debt. ^[4] The Ministry of Finance forecasts Cyprus's fiscal surplus will narrow to 2.3% of GDP in 2026 from 3.4% in 2025, then widen to 3.6% by 2029. ^[5] Marius Schulte, Assistant Vice President of the Global Sovereign Ratings Group, said the ability of economies to maintain a high level of investment despite the intensifying shrinkage of the labor force will be a decisive factor in the evolution of income growth and future growth dynamics. ^[6] Morningstar DBRS stated that maintaining a stable trajectory of economic convergence will remain an important credit factor for sovereign credit ratings. ^[7]