Fitch Ratings has confirmed Malta’s credit rating at A+ but upgraded its outlook for the country from “stable” to “positive”, effectively giving Malta its best score ever, the government said in a statement.

A+ positive is the best ever rating given by Fitch, which has joined another agency, DBRS, in giving Malta the best rating.

In their report, Fitch Ratings said that “Malta was the fastest growing economy in the European Union”, and that economic growth is expected to be sustained in the coming years. The agency remarked that the fiscal objectives reached by the government were beyond expectations, and that it forecast a 1% surplus.

“Fitch expects the recent track record of falling public debt/GDP will be maintained”. The 70% national debt reached in 2011 will fall to 40% next year, dropping to a level below that of other countries with similar ratings.

“Malta’s ratings are supported by...institutional strengths stronger than the majority of ‘A’ rated peers… Malta outperforms the ‘A’ median on the World Bank human development and governance indicators," the report said.

“The positive result by Fitch complements the European Commission’s Summer Forecast. Both reports conclude that Malta’s high economic growth is expected to be sustained in the medium-term while public finances are expected to continue on a sound footing”, Minister for Finance Edward Scicluna said.

Going forward, Fitch expects the Government to record an increasing surplus in the next two years despite the forecasted decline in revenue from the IIP. It also expects the recent track record of a falling debt-to-GDP ratio to be maintained.

Domestic demand is expected to be the made driver of real GDP growth, fuelled by strong labour market dynamics. Modest wage growth will bolster disposable incomes and support resilience in household consumption growth, with few signs of overheating in the economy. Fitch expects investment activity to remain high, supported by the absorption of EU structural funds.

On the external sector, Fitch noted that despite the slowdown in the Eurozone, Malta’s current account remained strong. It further expects the current account to continue to record healthy surpluses in the coming years.

Fitch acknowledged the government’s efforts to strengthen supervisory and regulatory institutions, noting that supervisory resources at both the FIAU and MFSA are increasing, with budget and hiring staff being prioritised.