Fitch affirms Malta’s credit rating at ‘A+’

The credit rating agency Fitch has affirmed Malta’s rating at ‘A+’ with the outlook being stable.

A statement by the Ministry for Finance said that the rating reflects the country’s strong institutions, “which are considered stronger than the majority of similar rated countries.”

“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 statement read.

Another key driver for the positive outlook was attributed to the positive rating was the downward trajectory in the debt to GDP ratio, driven by sound fiscal performance.

Fitch also expects Malta to carry on with upholding its fiscal rules, while pursuing a balanced budget in structural terms, while ensuring that expenditure growth does not exceed the economy’s potential growth rate.

Fitch also noted that there is little evidence suggesting overheating despite the economic growth, with forecasts showing that inflation will remain below 2%.

Efforts in strengthening supervisory and regulatory institutions were also welcomed by the credit rating agency, commending the recent increase in the FIAU and MFSA budget, as well as the new supervisory procedures introduced in July.

Fitch also notes that financial soundness indicators are strong and improving.

The agency expects Malta’s current account balance to remain in surplus despite a Eurozone slowdown.

Malta also outperformed the ‘A’ median on the World Bank human development and governance indicators.

“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 and ensuring that expenditure growth does not exceed the economy’s potential growth rate,” commented Minister for Finance Edward Scicluna.