In the most recent credit rating report published on September 13th 2024, Fitch Ratings has reaffirmed Malta’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘A+’ with a stable outlook, outlining Malta’s robust economic performance while highlighting the strong momentum with a projected GDP growth of 5.7% this year.
The agency’s projections for Malta’s GDP growth have an upward trend from the previous projections in March 2024, when it said it expected 4.1% for 2024. The upward trend has been boosted mainly by the resilient post-pandemic recovery of the tourism sector, but also by the strong-performing services and financial sectors. The new GDP growth projection comes to 5.7% in 2024, and 4.3% in 2025.
Important to note is Malta’s GDP growth rate of 5.7% compared to the overall Eurozone’s 0.8%.
According to Fitch, there is uncertainty associated with the tax adjustments that are in line with the EU’s Minimum Tax Directive; however, Malta has bestowed a six-year transition time to implement a minimum 15% effective tax rate for enterprises.
The current debt situation is below the EU’s threshold (60%), which Fitch forecasted to reach 49.6% by the end of 2024, which is also below the ‘A’ median of 53%. Financing risks are deemed minimal due to ample liquidity in the local banking system and a robust domestic investor base. Malta’s banking industry is highly regarded for its robustness, as seen by its high capitalisation, low non-performing loan ratio, and exemplary liquidity coverage ratio, all of which place the country in a favourable position within the EU financial sector.
The nation’s strong legal system and stable political climate contributed to its high ESG relevance score.
Should you require any further information in this respect, please refer to the Fitch Ratings Action Commentary.
