The Ministry for Finance notes with satisfaction the updated ratings by international credit rating agency Standard & Poor’s, whereby the agency has revised Malta’s outlook upwards from stable to positive while re-affirming its overall rating at BBB+.
Commenting on the report, Finance Minister Edward Scicluna remarked: “Standard & Poor’s’ decision to upgrade the outlook to positive re-affirms the solid performance of our economy and prospects for the upcoming years. Of particular satisfaction is their remark about the Government’s success in reforming key sectors, mainly the energy sector, and the concrete efforts to diversify the economy. We are also pleased to note the favourable comments in relation to Malta’s low exposure to Greece, with the agency stating that events in Greece will not have material bearing on Malta’s credit profile.”
In its latest report, Standard and Poor’s noted the strong economic growth performance in 2014 and expressed its view that this momentum is set to continue in the coming years, with Malta’s economic growth outpacing that of the Euro Area. The agency expects this positive performance to be sustained by a strong inflow of investment. Standard & Poor’s also acknowledges the diversification of our economy, particularly in medical tourism. This confirms Government’s vision to explore new sectors that can give Malta a competitive edge and sustain our growth model.
It is also positive to note the remarks by the rating agency about the cuts that reduced electricity charges by 25 per cent. It also noted the rising real wages in Malta, which will translate into higher purchasing power of the Maltese. These factors, coupled with an increased employment rate and broader female participation thanks to the various initiatives that were implemented to facilitate and encourage work effort, will continue to boost private consumption. Exports, helped by a strong performance in the tourism sector, are also expected to contribute positively to our economic growth.
Standard & Poor’s also commented on public finances, confirming the downward trend of both the budget deficit and the debt ratio. The agency believes that Malta’s budgetary consolidation will continue in the coming years, primarily owing to increased revenue from strengthening domestic demand and a decline in expenditure. It expects the debt ratio to decline to 62.8 per cent in 2018.
"Standard & Poor’s comments on Malta’s economic growth prospects, solid external prospects and gradual budgetary consolidation, which will place the government’s debt-to-GDP trajectory on a steady downward course are indeed encouraging and confirms EXANTE's justification to base our head office in the heart of the med" stated Patrick J O' Brien, EXANTE's communications director.