Fitch confirms Malta's A+ rating with a stable outlook

Global rating agency Fitch has confirmed Malta’s A+ rating with a ‘stable’ outlook,  citing the country’s resilient labour market and strong GDP growth as positive metrics.

In an assessment published late on Friday, the US-based agency said it expects Malta’s economy to grow faster than initially predicted this year, with GDP growth moderating to 3.4 per cent next year.

By comparison, the EU Commission is forecasting 2.8 per cent growth, the International Monetary Fund is predicting 3.2 per cent growth and the Central Bank expects a more optimistic 4.5 per cent growth rate.

Fitch noted Malta’s high per-capita income, a large net external creditor position and a pre-pandemic record of strong growth and sizeable debt reduction as the basis for its rating.

Conversely, the country’s large banking sector, its small economy and vulnerability to external shocks, and the sharp increase in public deficits and debt weigh against it, Fitch said.

Energy subsidies will most likely cost the country €605 million, or 3.5 per cent of GDP next year, Fitch estimates. Increased tax revenue, savings from phased-out COVID-19 measures and savings in government spending will help partially cover that...