The government announced S&P Global Rating's confirmation of Malta's A- rating with respect to the country's economic situation.
"Our ratings on Malta are supported by its strong growth performance, recurring current account surpluses driven by its large services exports and the government's improving budgetary and debt positions and fiscal management."
The Department of Information press release goes on to state that the report says that the economic growth in the coming years will reach a median of 4.3%, "so much so that it says that "we anticipate Malta's headline GDP growth will continue to exceed that of peers at similar income levels and stages of development".
According to the government's report on the international credit rating agency's report, "this economic success is due to the government's policies, particularly the authorities' commitment to policies incentivizing investment and hiring."
"In a high-growth environment, the government has consolidated its finances, reduced general government debt relative to GDP, and undertaken several structural reforms, notably those that have reduced the country's energy bill and increased female participation in the labour market."
The rating agency also said that the country will have a median of one per cent surplus in the coming years, whilst the government is planning to increase social spending, especially pensions, and also on other projects and infrastructure - this to the point that it was estimated by the credit company that the debt levels of the country will decrease to 30% of GDP, or half what debt Malta had in 2014.
"The government will work so that our country can continue enjoying international trust which will translate to more investment and increases in family and business income of Malta and Gozo."
In another statement later in the day, Finance Ministry also welcomed the rating.
It pointed out how, according to Standard and Poor’s, Malta’s positive rating is attributed to “its strong growth performance, recurring current account surpluses driven by its large services exports, and the Government’s improving budgetary and debt positions, and fiscal management.”
Finance Minister Edward Scicluna said, “We will remain fully committed to sustain our economic and fiscal success while strengthening the regulatory and supervisory standards of Malta’s institutions.”
The Finance Ministry highlighted how the credit rating report “acknowledges the Maltese authorities’ efforts to strengthen supervisory standards and their cooperation with the EBA. It refers to the FIAU’s submission of the action plan to the EBA, which included an increase in the overall budget and staff of FIAU to accommodate the AML initiatives, as an example in this regard.”
Standard and Poor’s said expects the Maltese economy to continue to expand at a fast pace with GDP growth likely to exceed that of countries with similar income levels and stages of development. This, it adds, reflects the authorities’ commitment to policies incentivising investment and hiring.
The credit rating report notes that Malta’s real GDP growth accelerated to 7.7 per cent on average in the 2014 to 2018 period. It also notes that the structural shifts in the economy have created new employment opportunities while reducing the unemployment rate to 3.8 per cent in 2018, the lowest in two decades.
Standard and Poor’s acknowledge that the Government has consolidated its finances, reduced general government debt relative to GDP, and undertaken several structural reforms, notably those that have reduced the country’s energy bill and increased female participation in the labour market.
The credit rating agency further anticipates that macroeconomic policymaking will remain geared toward further fiscal consolidation. Indeed, they expect fiscal surpluses to continue in the coming years allowing the ratio of government debt to GDP to continue to decline.