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PRESS RELEASE BY THE MINISTRY FOR FINANCE Finance Minister Edward Scicluna welcomes another positive rating for Malta
The Ministry for Finance welcomes the latest credit rating by Creditreform, another renowned German credit rating agency which affirmed Malta’s sovereign rating at ‘A+’ with a stable outlook.
The positive rating reflects Malta’s very strong economic expansion, which over the past five years has outpaced growth levels seen in the EU by a wide margin, boosting per-capita income and employment. Creditreform also views “Malta’s healthy and improving public finances as a key credit strength”. Indeed, it states that the ‘A+’ rating reflects the prudent budget execution underpinned by a steadily improving headline balance and the government’s commitment to run surpluses.
Creditreform acknowledges that the government’s debt-to-GDP ratio declined for the fourth consecutive year in 2017, standing almost 20 p.p. below its peak in 2011. Given the favourable fiscal outlook and robust growth prospects, it expects the government debt to remain on a steep downward trajectory over the coming years, with the debt-to-GDP ratio projected to be close to the 40 per cent mark by 2020.
Creditreform also acknowledged the recent reduction in contingent liabilities and expects such liabilities and the associated risks to continue to recede.
Creditreform notes the strong employment gains recorded in recent years which were facilitated by positive net migration of foreign workers and a steadily rising participation rate. It notes that the Maltese participation rate is now at par with the euro area adding that “the structural reforms with regard to childcare and pensions appear to have paid off”. It also commended government policies to lift participation rates of women and the elderly population including the provision of free childcare and various measures to encourage later retirement.
Creditreform notes that the sovereign’s creditworthiness continues to reflect the generally high quality of institutional conditions as confirmed by the World Bank’s latest edition of the Worldwide Governance Indicators (WGIs). Malta outperformed most A-rated peers when it comes to the perception of the extent to which public power is exercised for private gain, and the quality of contract enforcement, property rights, and courts.
The credit rating agency acknowledges that the Maltese authorities have pushed ahead with reforms aiming to strengthen the enforcement of AML provisions. It also notes that efforts to improve internal governance procedures and risk assessment methodologies, as well as to increase human resources in the FIAU, are ongoing.
Finance Minister Edward Scicluna comments, “I am pleased to note that, yet another European credit rating agency is attributing its ‘A+’ rating to the government’s successful roadmap”.