Following the credit rating upgrades by Standard and Poor’s and Fitch, another Canadian agency, DBRS, has affirmed Malta’s credit rating at A while upgrading the trend on the ratings to positive.
This result has been mainly attributed to Malta’s Eurozone membership and its solid position. The Eurozone membership ensures reliable access to European markets, fosters strong and credible macroeconomic policies and makes available financial facilities from European institutions. The expansion of trade and travel links with Europe has also provided a boost to the country’s economy. Malta’s economy is among the fastest growing in the Euro area and its growth prospects look favourable.
Furthermore, a favourable public debt structure and the robust financial position supported the positive rating. DBRS acknowledged that, following a fiscal consolidation process since 2013, both the Malta headline and the structural deficits turned into surpluses, and the government debt ratio, already 12 percentage points lower than its 2011 peak, fell below 60% of GDP. The improvement in public finances has been driven by strong revenues as well as moderation in expenditure, and supported by a strengthened fiscal framework.
Commenting on the positive credit rating, Minister for Finance Edward Scicluna said: “Four years ago, we had promised to work on upgrading Malta’s credit rating which would make our country more attractive to foreign investors. In contrast with the past deteriorating state of public finances with ballooning deficit and debt ratios, we directed our efforts to addressing such issues, bringing about an upgrade to Malta’s rating, and hence honouring our promise.”
Thinking of the future, DBRS positively expects that the improvement in the fiscal position over the past three years is likely to be sustained. Moreover, a reduction in public indebtedness in the near to medium term could lead to an upgrade in the ratings. Finally, successful implementation of reforms to improve the efficiency of the public sector, boost private sector investment, and increase further labour force participation could also have a positive effect.
If you are harbouring the idea of moving out of your country and relocating to a strong and stable jurisdiction, this may be the right time to make the leap to Malta.
Written by Marta Bellamoli, Marketing Co-ordinator