The Ministry for Finance welcomes the latest credit rating report issued by Fitch which affirmed Malta's rating at 'A+' with a positive outlook.
The 'A+' rating reflects Malta's institutions which are considered stronger than the majority of similarly rated countries. Malta also outperformed the 'A' median on the World Bank human development and governance indicators.
The positive outlook reflects Fitch's expectation of sustained high economic growth from diverse sources in the medium term. As a result, it expects Malta's per capita income to continue converging to the EU average in the coming years.
The firm downward trajectory in the debt to GDP ratio driven by sound fiscal performance is the other key driver of the positive outlook. In this regard, Fitch also acknowledges that the government guarantees are on a clear downward trend.
"I am pleased to note that Fitch has acknowledged our policies to sustain growth by diversifying the Maltese economy as well as our sound and prudent management of public finance. More importantly, Fitch accepts the government resolve to continue upholding its fiscal rules targeting a balanced budget in structural terms (net if IIP receipts) and ensuring that expenditure growth does not exceed the economy's potential growth rate," commented Minister for Finance Edward Scicluna.
Fitch expects Malta to continue upholding its fiscal rules targeting a balanced budget in structural terms and ensuring that expenditure growth does not exceed the economy's potential growth rate.
Despite the strong economic growth enjoyed by the Maltese economy, Fitch notes that there has been little evidence of overheating. Indeed, it forecasts inflation to remain below the 2 per cent threshold this year and the next.
Fitch acknowledges recent efforts to strengthen supervisory and regulatory institutions. Indeed, it commends the recent increase in the FIAU and MFSA budget, as well as the new supervisory procedures introduced in July.
The credit rating agency also notes that financial soundness indicators are strong and improving.
On the external side, the credit rating report expects Malta's current account balance to remain in surplus despite the eurozone slowdown.