2200 bbllnn

€

the economy’s outperformance relative to earlier program forecasts. Nonetheless, at B (low), the rating underscores the depth of Cyprus’ challenges and heavy reliance on EU funding.”

DBRS also said that “in the long-term, exploitation of offshore natural gas deposits should provide a major new source of income for the island economy,” adding that the government estimates that current proven reserves are likely to bring in net revenue of close to EUR 20 bln over the next 20 years (over 120% of 2013 GDP).

“If managed prudently, the associated financial inflows could help to significantly reduce Cyprus’ vulnerability to shocks.

In addition, related investment and lower domestic energy costs could have ancillary benefits for the Cypriot economy. The pace of development in the gas sector could nonetheless be affected by relations with Turkey,” it noted.