Fitch predicts that Cyprus’ government debt will shoot above 100 percent of its GDP, more than 12 points more than its previous estimate. The agency also expected the government to miss its goal of bringing the budget deficit below 3 percent of GDP through another round of spending cuts and tax increases by as much as a percentage point.

Cypriot banks could suffer further losses if Greece decides it must leave the 17-nation eurozone, since they also hold an estimated €22 billion ($27.5 billion) in Greek business and household loans.

Compounding the island’s banking troubles are projections that its economy will shrink by 1 percent of GDP this year.

(via WashPo)