First A+ rating for Malta in 2024

Malta’s economy has performed one and a half times better than experts had predicted.

On Friday, Malta received its first positive credit rating this year when the international agency Fitch Ratings reaffirmed its rating as A+ with a stable outlook.

In their report, the international experts noted the very good performance of the Maltese economy. In fact, they pointed out that “the economy expanded strongly by 5.6% in 2023, outpacing both our September forecast of 3.5% and eurozone growth by a significant margin”. This means that Malta’s economy has performed one and a half times better than experts had predicted. Furthermore, according to Fitch Ratings, the Maltese economy will continue to grow at good rate, expanding by around 4% in the coming years. The unemployment rate is expected to remain below what it was before the pandemic.

One of the things most highlighted in the Fitch report is the Maltese government’s intervention to curb the cost of living. While recalling that the Government is still investing a substantial amount to keep the price of electricity, fuel, and gas stable, Fitch’s experts mentioned the effect of the Stabilità scheme. In fact, they note that the effects of this scheme have already led to a decrease in the rate of food inflation in February. They are thus predicting that the inflation rate will normalise to below 3% this year and approach 2% in the following years.

As regards public finances, Fitch Ratings note that, despite the Government’s strong intervention to protect families and firms from inflation, the deficit fell last year to 5%. While the Government is forecasting the deficit to fall to 4.5% this year and 4% the following year, Fitch Ratings’ experts believe that the deficit will be 4.1% this year and 3.5% the next.  They are more optimistic than the Maltese government and emphasise that the debt burden will remain below 60% of GDP.

Finally, in their report, Fitch Ratings also state that Malta has “strong institutional capacity, effective rule of law, and a low level of corruption”.

In light of all this, the experts of this agency confirmed their rating for Malta as A+, and gave another strong signal of the confidence they have in our country’s economy and the way it is being managed by the Maltese Government.

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