Sandard & Poor's upgrades Cyprus 1 notch to B+ on commitment to rescue deal, resilient economy

Economic Indicators Associated Press

Rating agency Standard & Poor's gave Cyprus a pat on the back with a one notch upgrade to its credit grade, to B+, citing its commitment to the terms of its bailout program and better-than-expected economic growth.

Continue Reading Below

The agency also said the country's outlook is stable, with good economic progress offset by lingering challenges to its banking system, which is still burdened with a huge amount of bad loans.

It hailed Cyprus' strong budgetary performance and projected a shallower recession this year. It expects an economic contraction of around 3 percent, 0.8 percent less than a previous forecast.

The agency said Friday that it expected heightened overseas investment interest, but warned that more EU sanctions against Russia could hurt tourism.