Minister for Finance Edward Scicluna welcomes another positive credit rating for the Maltese economy, this time by Creditreform Rating which affirmed Malta’s long-term sovereign rating at A+ with a stable outlook.
“Just two days after receiving the green light by the European Commission on Malta’s 2018 Budget and the health of the economy, we have now received another positive endorsement, this time by the German credit rating agency, Creditreform. Such results will continue to boost international and local consumer and business confidence,” commented Minister Scicluna.
The A+ rating was driven by a number of favourable macroeconomic and fiscal developments including the very strong growth performance exhibited by the Maltese economy which supported further improving labour market conditions and the output growth, which the credit rating agency expects to remain among the strongest in Europe in 2017 and 2018.
Creditreform also attributes the positive rating to the advancements in budget consolidation in 2016, which it expects to continue in the medium term. Indeed, it positively remarks that the Government has a track record of overachieving its fiscal targets.
Underpinned by budgetary surpluses and robust growth prospects, Creditreform expects further progress on debt reduction, with the government’s debt-to-GDP ratio expected to fall close to 50 per cent in 2018.
In the coming years, economic growth is expected to be backed by further gains in disposable household income and ongoing employment growth, which is in turn supporting private consumption. Indeed, on employment, the report acknowledges the labour market policies implemented in 2014 which were aimed at increasing the labour force participation rate especially amongst females and notices that such policies are indeed bearing fruit.
On external trade, Creditreform positively notes that exports have sustained their growth momentum, contributing to an improvement in the trade balance and an increase in the current account surplus.