Standard & Poor’s reaffirms Malta’s ‘A’ credit rating

Standard & Poor’s Global Ratings has reaffirmed Malta’s credit rating at ‘A’, with the outlook also remaining positive.

The credit rating agency said this meant that it “could raise the ratings on Malta over the next 18 months”.

“Our ratings on Malta are supported by its strong growth performance coupled with consistent current account surpluses driven by its large services exports, as well as its improving budgetary position and fiscal management,” S&P said, “We anticipate Malta’s growth will likely exceed that of peers at similar income levels and stages of development”.

S&P highlighted that, in recent years and in the midst of a high-growth environment, the government had narrowed the budget deficit, reduced general government debt-to-GDP and undertaken various structural reforms, namely those which have increased women’s participation in the labour market and lowered Malta’s energy bill.

“We anticipate that macroeconomic policymaking will remain geared toward further fiscal consolidation”, the agency added, “Efforts to reform state-owned enterprises further, reduce skill mismatches, and improve the long-term sustainability of public finances in the context of an ageing population will be implemented gradually”.

In a statement, the government said that S&P’s analysis from September last year had predicted an economic growth rate of 4% in the coming years, but it was now expecting a higher rate of 4.5%.

The agency said it believed the country would maintain a good financial situation, the government said, with a surplus in the coming years. The government emphasised that S&P had also noted the plans to increase social spending, reduce tax, and investment more on projects and infrastructure.

Despite this, the agency is still predicting the national debt will be reduced to 44% of GDP by 2021, the government remarked.

“While the government has noted S&P Global Ratings’ comments, it will be working so that the country can keep reaping benefit from a increased level of trust in it at an international level - trust which leads to more investment and an improvement in the income of our families and businesses,” the government said.