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Fitch upgrades Malta’s credit rating to A+ with a stable outlook

The Ministry for Finance is pleased to attest to another milestone achieved by the Labour Government this year. Indeed, following Standard and Poor’s credit rating upgrade in October of last year, Fitch has now upgraded Malta’s sovereign credit rating from A to A+ with a stable outlook. The upgrade reflects the progress made by this Government during the last four years on various priority sectors, in particular the consolidation in public finances.

 

PRESS RELEASE BY THE MINISTRY FOR FINANCE

The latest Fitch Ratings’ report is another independent confirmation of Malta’s economic achievements – Minister Edward Scicluna

The independent credit rating institution defines one of the main contributors to this upgrade as the ‘fast declining gross general government debt’ which is expected to ‘decrease to 50% of GDP in 2019…supported by strong nominal GDP growth and recurrent primary surpluses.’ Fitch added that it also expects Government-guaranteed liabilities to decline in the coming years.

Another main driver contributing to this upgrade is the positive turnaround in the fiscal balance, where the Government successfully turned years and years of fiscal deficits into a fiscal surplus last year. Fitch expects Malta to continue achieving a fiscal surplus in the coming years, which, it added, reflects the Government’s efforts to improve tax collection and tax revenue; reduce unnecessary expenditure on social benefits and ease pension pressures; and support higher robust economic growth.

Fitch expects the Maltese economy to continue growing at a faster pace than that of similarly rated countries, fueled by the solid performance of Maltese exports, notably in the services sector, a dynamic labour market, and investment. The latter is expected to pick up in 2019, boosted by the gradual absorption of new EU funds and the launching of large transport, health, and education projects.

Malta’s rating upgrade also reflects the fact that Malta successfully built a large net external creditor position. Fitch expects Malta’s external position to remain strong, where the current account surplus is expected to increase to well over 7 per cent in the 2017-2019 period.

The credit rating report acknowledges Malta’s improvement in the ‘Ease of Doing Business’ report, where Malta’s ranking improved by 7 places in just one year. Fitch also notes that Malta’s credit rating upgrade also reflects its strong governance.

Fitch expects the Maltese banking sector to remain sound with improved profitability, non-performing loans on a declining trend, improved capitalisation, and conservative lending.

Minister for Finance Edward Scicluna states that: ‘Government’s vision for Malta is turning into reality, in that Malta is becoming a solid top performer in economic growth, employment growth, and sound public finances. All this is being confirmed by the rating agencies.’

Rapport favorevoli ta’ Fitch Ratings dwar Malta: konferma oħra tas-suċċess ekonomiku ta’ pajjiżna – il-Ministru Edward Scicluna

Il-Ministru għall-Finanzi Edward Scicluna laqa’ b’sodisfazzjon ċertifikat ieħor pożittiv li aġenziji indipendenti internazzjonali taw dwar l-andament ta’ kif qed jitmexxa l-pajjiż. Wara li f’Ottubru tas-sena li għaddiet l-aġenzija Standard and Poor’s tejbet rating dwar Malta, issa tħabbar titjib fir-rating mill-aġenzija Fitch Ratings li tejbet ir-rating diġà pożittiv minn ‘A’ għal ‘A +’ u għamlet previżjonijiet stabbli dwar ir-rating ekonomiku ta’ pajjiżna.

Fitch tgħolli r-‘rating’ ta’ Malta għal “A +” u tpoġġi t-tbassar ekonomiku għal “stabbli”

L-analisti ta’ Fitch qalu li “Malta’s public debt dynamics are improving as reflected in the fast declining gross general government debt (GGGD)”, filwaqt li “Malta’s GGGD is forecasted to decrease further to 50% of GDP in 2019…supported by strong nominal GDP growth and recurrent primary surpluses. Government-guaranteed liabilities are set to decline to 11.9% of GDP by the end of 2017 from 13.6% of GDP in first quarter of 2017”.

STQARRIJA MILL-MINISTERU GĦALL-FINANZI

Il-Ministru Edward Scicluna ddeskriva r-rapport ta’ Fitch bħala “konferma oħra tas-suċċess ekonomiku ta’ pajjiżna”.

 

L-esperti ta’ Fitch ifaħħru wkoll is-surplus li rnexxielu jikseb dan il-gvern u jbassru li “the general government balance to remain in a surplus of 0.5% of GDP over 2017-2019”. Fitch tgħid li s-surplus jirrifletti t-titjib fil-ġbir u d-dħul mit-taxxi, it-tnaqqis f’infiq mhux neċessarju f’benefiċċji u t-titjib fis-sostenibbiltà tal-pensjonijiet kif ukoll it-tkabbir ekonomiku robust.

L-esperti ta’ Fitch iżidu, “we expect the economy will continue to grow at a faster pace than its similarly rated peers…’’ u dan grazzi għall-prestazzjoni pożittiva fl-esportazzjoni, fis-suq tax-xogħol u fl-investiment. Dwar l-investiment Fitch iżżid li mistenni jkompli jiżdied fl-2019 permezz tal-Fondi Ewropej u l-proġetti fit-trasport, fis-saħħa u fl-edukazzjoni.

It-tbassir għall-kummerċ estern għas-snin li ġejjin ukoll hu sodisfaċenti, u Fitch qed tistenna li s-surplus fil-kont kurrenti (current account) ikun ’il fuq minn 7 fil-mija (7.7 fil-mija) fil-perjodu 2017-2019.

Ir-rapport jirreferi għar-rapport tal-Bank Dinji, ‘Ease of Doing Business’, u li matul din is-sena Malta telgħet seba’ postijiet u ġiet aktar kompetittiva. Barra minn hekk Fitch tattribwixxi l-upgrade fir-rating għal governanza b’saħħitha li qed juri dan il-gvern.

Fejn jidħlu l-banek kummerċjali l-esperti ta’ Fitch kellhom kliem ta’ tifħir u qalu li “The Maltese banking sector remains sound with improved profitability, non-performing loans on a declining trend, improved capitalisation, and conservative lending standards”.

“Dan ir-rapport jikkonferma li l-viżjoni ta’ dan il-gvern għal Malta qed issir realtà hekk kif Malta qed tiġi meqjusa fost l-aqwa fit-tkabbir ekonomiku, fit-tkabbir tal-impjiegi, fil-finanzi pubbliċi u issa anke fir-rating tal-kreditu tal-pajjiż. Dan qed jawgura ferm tajjeb għall-investiment barrani f’pajjiżna li jgħin biex il-ġid ikompli jasal għand kulħadd”, qal il-Ministru għall-Finanzi.

                          

Saturday 12th August 2017


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