NICOSIA, Cyprus (AP) — Moody’s two-notch upgrade of Cyprus' credit rating to A3 from Baa2 opens the threshold to quality foreign investment that will generate new jobs, the president said Saturday.

President Nikos Christodoulides said in a statement that the rating agency’s action reflects his government’s efforts at cementing Cyprus’ reputation as a credible investment destination through disciplined fiscal policy, banking sector stability and financial reform.

Finance Minister Makis Keravnos said the upgrade marks the first time that Moody’s has elevated Cyprus back into the upper medium grade investment category since 2011, when a brewing financial crisis brought the country to the brink of bankruptcy that required a bailout from the European Union and the International Monetary Fund two years later.

Moody’s said its rationale for the ratings upgrade and stable outlook was grounded in Cyprus’ “prudent fiscal policy” that combined spending cuts with strong public revenue growth, resulting in fiscal surpluses over the last two years.

The agency said smaller fiscal surpluses are expected to continue until 2028, while a drop in public debt “has been one of the most substantial globally,” dropping from 113.6% of gross domestic product in 2020 to 73% in 2023.

According to Moody’s, debt is forecast to continue dropping to 50% in 2027, while the economy will grow by an average of 3.2% between 2024 and 2028, thanks to continued growth in sectors including information and communication technology, finance and insurance.

Companies are opting to set up their headquarters in Cyprus, particularly from Ukraine, Israel and the Middle East. Foreign investment in energy, education, construction, health care and tourism will also buoy economic growth over the medium term.

Moody’s said downside risks include cancellation of large investment project, a burgeoning public sector wage bill and spending pressures in health care.