Malta’s Credit Rating
The highly respected credit ratings agency Fitch has reaffirmed the country’s rating as A+ with a stable outlook. Malta’s perceived economic strengths were also considered as balanced. The agency came to this conclusion and pointed out that its findings were as a result of a high per-capita income and a pre-pandemic record of strong growth while there was also a sizeable debt reduction. Furthermore, Malta delivered positive economic results which were due to the country’s recovery from the pandemic.
The agency stated that it did not expect a noticeable decrease in Malta’s deficit for 2024 and predicted a fiscal deficit of around 4.8% for that year. Malta’s government have not indicated any interest in phasing out any energy subsidies plus there will be restructuring costs for Air Malta on the cards which will contribute to expenses. The government’s subsidies assisted in keeping inflation down and energy prices are not expected to contribute to inflation, although levels were deemed to be elevated for now.
At the same time, a promise of a possible upgrade in status was also mentioned due to Malta’s continuous fiscal consolidation, addressing key shortcomings in governance and banking supervision and the progress made regarding economic diversification.
The government of Malta expressed its satisfaction with this latest rating, stating that it was affirmation of the government’s economic leadership. It simultaneously softened concerns expressed about debt saying that it agreed with the ratings agency’s findings that “public debt will remain moderate and relatively stable.”
Fitch also stated in the same report that Malta had an effective rule of law and a strong institutional capacity and Malta’s scoring remained high when compared to its peers.