In the same week that China had its outlook changed from stable to negative, meaning that it now risks being downgraded, international agency S&P Global Ratings confirmed Malta’s stable rating.
The agency’s economists predict Malta’s economic growth “to remain above European peers and then rebound, supported by EU funds and tourism”. In their report they repeatedly use words such as “resilience”, “robust”, and “solid”, in contrast to the lack of confidence that is being shown in large economies such as the US, China, and France, which have all been given negative prospects.
According to S&P Global Ratings, the Maltese economy will grow almost seven times the rate observed across the Euro area. This was attributed to a key factor: “government’s decision to maintain stable energy prices softened the hit to private consumption, as it contained inflation”. The report also noted that households in Malta have around two-and-a-half times the average household savings observed across the Euro area. This too is a factor underpinning our economy’s resilience.
For future years, the international experts are predicting that private consumption will accelerate, now that inflation is falling. They also think that investment will pick up. For instance, they believe that NextGeneration EU and other EU funds should increase GDP by 0.8%. Meanwhile, the rating agency notes how the Government plans to reduce the price of energy production through investment in the second interconnector together with investment in renewable energy projects.
Public finances are expected to improve despite the government’s strong support on energy prices. S&P Global Ratings focus attention on the fact that Government debt has remained moderate. Conversely, foreign experts are predicting that the Maltese Government’s debt will never approach the 60% benchmark, which had been regularly exceeded before 2013. The confirmation of the stable rating by S&P Global Ratings is the latest in a long series of positive certificates for our country due to the progressive policies adopted by the present administration. Against a backdrop of a worsening international economy, and the negative certificates being given to larger countries, the confidence in Malta stands out even more.
Photo: Polina Kovaleva