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S&P upgrades Cyprus on better economic performance

NICOSIA, Cyprus (AP) — Credit rating agency Standard & Poor's is more upbeat about Cyprus' public finances following a better-than-expected performance since the country's financial rescue a year ago.

The agency upgraded Cyprus' rating by one notch to B and said the outlook remains positive, which could augur further upgrades in the next year. It said a resilient Cypriot economy hasn't shrunk as much as anticipated and that the government is meeting all the fiscal targets set out in its bailout deal with other eurozone countries and the International Monetary Fund.

The agency said Friday that risks to financial stability remain, mainly related to a banking sector that is hobbled by many bad loans. The bailout crushed Cyprus' banking sector after sanctioning a grab of uninsured savings in its two largest banks.

Cypriot President Nicos Anastasiades lauded the development saying it provided fresh confirmation that the country is "on the right path" even though much work remains to be done. Anastasiades also renewed his government's commitment to stick to the bailout's terms and repair the economy.

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