The Ministry for Finance welcomes another positive credit rating report published by another renowned credit rating agency—Fitch—affirming Malta's sovereign credit rating at 'A+' with a stable outlook.
The credit rating report attributes the 'A+' rating to Malta's high income per capita, strong governance and human development indicators relative to peers, robust economic growth, and a large net external creditor position, amongst others.
Fitch acknowledges that the strong private and public consumption is driving growth, with private consumption supported by low interest rates and strong employment and wages. It notes that such strong growth has not led to overheating as reflected in the absence of macro imbalances and the inflation rate, which remained contained.
Fitch further notes that Malta's budget performance has been stronger than similarly rated countries and is on an improving trend. It acknowledges that Malta's fiscal policy outlook is anchored by the Government's commitment to a structural fiscal balance net of IIP revenues, with IIP revenues ringfenced for investment purposes.
Fitch commends the rapid fall in public debt and expects the debt-to-GDP ratio to continue declining owing to the low interest payments, strong nominal GDP growth and recurrent primary surpluses. It also acknowledges the Government's commitment to reduce guarantees, noting that they fell to 9.5 per cent of GDP at the end of 2017, down from 13.5 per cent in 2016.
On the financial sector, Fitch acknowledges that the Maltese banks remain sound and well capitalised while on external trade, Fitch notes Malta's current account surplus driven by the growing services trade sectors. It further expects the trade surplus to be sustained in the coming years.
On governance, the credit rating report states that Malta outperforms the 'A' median on the World Bank human development and governance indicators.
Minister for Finance Prof. Edward Scicluna stated that, "the 'A+' rating by Fitch following Moody's 'A3' grade earlier this week, continue to strengthen our view that the Government's strategic vision for our country is being accomplished".