Malta's fiscal strength and its growth prospects prompts Moody's to raise Malta's credit raiting to A3 positive.
Malta’s rating has been raised to A3 positive from A3 stable by credit rating agency Moody’s – the highest it has ever been - following an audit published last Summer. The rating upgrade was attributed to Malta’s fiscal strength and its growth prospects. In particular, the agency commended the Island’s measures targeting the labour market and the considerable progress made in diversifying Malta’s energy sources and increasing energy efficiency. A “sustained pace of public sector debt reduction, supported by prudent fiscal policy and containment of contingent liabilities” also contributed to Moody’s credit rating improvement.
Another international credit rating agency DBRS also raised its rating for Malta from A to A High, the first time it has done so since October 2013. DBRS’ experts stated that since the agency’s latest review, the projection of the general government debt ratio has been materially revised downwards due to more favourable growth prospects and stronger primary balances in coming years.
The agency said it believed that Malta’s debt will amount to 41 per cent of the GDP by 2022 – 7% points fewer than previously predicted.
DBRS referred to the gaming industry as one of the most important in the economy but insisted that other sectors were also crucial to the growth. DBRS reported that “Malta remains one of the top performers in the euro area, according to DBRS, and the economic activity and growth continues to surprise analysts.”
Moody’s prognostics include a further reduction of about 10pp in the debt to GDP ratio over the years 2016-2019, echoed by DBRS’ predictions of further decreases by 2020.