NICOSIA, Oct. 20 (Xinhua) -- Fitch became the second international rating agency to upgrade Cyprus credit ratings to investment grade, after Standard and Poor's upgrade to the same grade in September, a statement said on Saturday.
The statement by Fitch said it raised Cyprus's ratings to BBB- with a stable outlook from its previous junk BB+ ratings, where it had been relegated since 2012.
The downgrade of Cyprus's ratings to junk level had forced the eastern Mediterranean island into a three-year bailout program agreement with Eurogroup and International Monetary Fund in 2013.
Cyprus returned to growth at the end of 2015 and has shaped a fast-growing economy thanks to a prudent fiscal policy and reforms of the public service.
"Cyprus is benefiting from a strong economic recovery with real GDP reaching pre-crisis level and the economy forecasted by Fitch to grow 4 percent in 2018 and 3.8 percent in 2019, supported by large foreign-financed investment projects in construction and tourism, and robust private consumption," said Fitch.
It added that the robust growth is projected to help reduce the sovereign debt to 70 percent of GDP by 2027, from its current high of 104.4 percent.
Fitch also cited as a medium-effect reason for its upgrading the reduction of non-performing loans of the banking system to 30 percent at the end of September this year, relative to 44 percent in 2017.
Finance Minister Harris Georgiades, who has led the economic reform program since 2013, welcomed Fitch's upgrade, noting that it was the result of a strong growth, a surplus budget and moves in the banking sector to reduce non-performing loans.
"We continue...," he said in a Twitter message.