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.
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