Creditreform Rating has affirmed Malta’s long-term sovereign rating at A+ with a stable outlook.
Government said that the A+ rating was driven by a number of favourable macroeconomic and fiscal developments including the very strong growth performance exhibited by the Maltese economy which supported further improving labour market conditions, and the output growth, which the credit rating agency expects to remain among the strongest in Europe in 2017 and 2018.
Creditreform also attributed the positive rating to the advancements in budget consolidation in 2016, which it expects to continue in the medium term, remarking that the Government has a track record of overachieving its fiscal targets.
Underpinned by budgetary surpluses and robust growth prospects, Creditreform expects further progress on debt reduction, with the government’s debt-to-GDP ratio expected to fall close to 50 per cent in 2018.
In future, economic growth is expected to be backed by further gains in disposable household income and ongoing employment growth, which is in turn supporting private consumption. The report acknowledged the labour market policies implemented in 2014 which were aimed at increasing the labour force participation rate especially amongst females and notices that such policies are indeed bearing fruit.
On external trade, Creditreform noted that exports have sustained their growth momentum, contributing to an improvement in the trade balance and an increase in the current account surplus.
Finance Minister Edward Scicluna welcomed the positive credit rating for the Maltese economy, saying that such results would continue to boost international and local consumer and business confidence.