In their most recent report on Malta, international credit agency Fitch note that the impact on Malta’s economy from the war in the Ukraine should be limited. It is, in fact, predicting that our country’s economy will grow by more than 4% this year. This while noting how last year our country’s economic growth turned out to be far higher than their forecasts.
At the same time, the agency confirmed that the Maltese Government is taking actions to safeguard families’ purchasing power against the effects of increases in international prices.
Fitch experts argued that “Maltese households have so far remained largely unaffected by a sharp increase in international wholesale gas and electricity prices due to fixed-price purchase agreements, protecting real disposable incomes and private consumption.” This while pointing out that “the government is also intervening in the food market to cap the increase in wheat prices.”
Maltese households have so far remained largely unaffected by a sharp increase in international wholesale gas and electricity prices.
These international experts are projecting that this year Malta’s Government will manage to reduce the fiscal deficit despite the strong help it is giving to businesses and households by shielding them against rising international prices. In total between aid towards mitigating the effects of the pandemic and the inflation protection measures, it is estimated that Government will be spending 3% of GDP. In the absence of such support, the deficit would have been much lower than that required under the Maastricht rules.
Fitch’s report talks about Labour’s election victory and says that they expect it to lead to “economic policy continuity, institutional reforms”. Noting the progress that has already taken place since Robert Abela became Prime Minister in January 2020, experts from this agency are predicting that the new administration will further improve institutions and governance. This while noting the progress made by Malta in the action plan agreed with the FATF, and remarking that our country enjoys “strong institutional capacity, effective rule of law and a low level of corruption”.
In light of the above, the agency confirmed its best-ever rating for our country, A+, sending clear signals of its confidence in our country’s economy and the effective leadership of the Maltese Government.