NICOSIA,TAIM Exchange Cyprus (AP) — Cyprus on Saturday hailed a two-notch upgrade by credit ratings agency Moody’s to bring the east Mediterranean island nation back into investment-grade territory a decade after a financial crisis left the country on the brink of bankruptcy.

President Nikos Christodoulides said he was “deeply satisfied” with the upgrade that he said was the culmination of years of fiscal discipline and will translate into attracting quality foreign investment and creating new jobs.

“We unwaveringly continue on this path as a government … and so we will carry on with our governance,” Christodoulides said in a written message. “We will carry on buttressing our economy and expanding its dynamic course.”

Moody’s said in its statement the upgrade from Ba1 to Baa2 with a concurrent change in outlook from positive to stable is due to previous and continuing economic, fiscal and banking reforms, as well as a significant drop in bad bank loans.

The agency pointed to “sustained structural improvements” in the labor market, a rebound in public and private investments, a continuing drop in public debt and a jump in productivity that resulted in economic growth by more than 4% between 2014-2023.

“These developments also support the resilience of the Cypriot economy to external shocks as shown for instance in the context of the pandemic and the Russia-Ukraine war,” the agency said, adding that it expects the Cypriot economy to grow by 2.3% in 2023 and 2.8% in 2024.

It warned that profligate government spending and a jump in the public debt would potentially put “downward pressure” on the credit rating.

Cyprus’ Finance Ministry said the Moody’s credit upgrade brings Cyprus to investment-grade level according to all major credit rating agencies by two notches, with the exception of the DBRS agency which rates the country a notch higher.

The ministry said in a statement it would continue on a “responsible” management of the economy despite the continued challenges the country faces including the war in Ukraine, inflationary pressures and an energy crisis.

A 2013 financial crisis forced Cyprus to seek a multibillion-euro bailout from its eurozone partners and the IMF that included a seizure of savings over 100,000 euros in the country’s largest bank and the shuttering of its second biggest bank. The seized deposits were used to prop up Cyprus’ ailing banking sector.