S&P reaffirms ‘A-/A-2’ ratings with positive outlook

A Standard and Poor’s credit rating report confirms Malta’s A-/A2 long-term and short-term ratings and reaffirms the outlook of the Maltese economy as “positive”.

The “positive” rating outlook is supported by the expected continuing strong growth performance coupled with consistent current account surpluses, together with the improving budgetary position and fiscal management.

The report also outlines that the Maltese economy has enjoyed another year of strong, economic expansion driven by net exports. Investments in energy and logistics were also important contribu- tors.

S&P notes that the structural shifts in the economy have created new employment opportunities and the unemployment rate declined to 4% in 2017. Reforms made by the government have improved participation rates, particularly among women.

The report acknowledges that the fast pace of growth of the new economic sectors and the implementation of recommendations from the spending reviews have allowed a consolidation of public finances. This led to the narrowing of the budget deficit leading to a surplus and the reduction of the general government debt.

Minister for Finance Edward Scicluna comments: “I am pleased to welcome the comments passed by rating agencies since the ensuing recommendations help us in our stride to continue having a sustainable economy. Likewise, we will also continue to strengthen our regulatory institutions in their fight against money laundering.”

S&P anticipates that government’s strategy and policymaking will remain geared towards further fiscal consolidation.

The report highlights that the positive outlook indicates that the ratings could be raised if Malta maintains its economic growth and fiscal performance.