Following on from the DBRS rating of Malta's Long-Term Foreign and Local Currency, the below is their analysts' take on the sovereign rating of country:

"Malta is expected to have exceeded its fiscal objective again in 2017, resulting in a faster-than-expected fall in its public debt ratio to 53.6% of GDP. The rating upgrade reflects our view that Malta's debt trajectory has improved significantly due to more favourable growth prospects and stronger primary balances in coming years. The debt-to-GDP ratio is now forecast to fall to 41.2% by 2022, almost seven percentage points less than previously anticipated.

The Stable trend reflects DBRS's opinion that further upgrades are unlikely in the absence of: (1) a sustained material reduction in the public debt ratio to low levels driven by sound fiscal management and robust economic performance; or (2) a significant increase in Malta's income per capita levels, fully converging to the EU average.

While DBRS's baseline factors in a relatively positive economic and fiscal outlook, a deterioration in the trajectory for public debt in the medium term could exert downward pressure on Malta's ratings. This could derive from: (1) a deterioration in growth prospects, (2) a relaxation of fiscal discipline, or (3) the materialization of contingent liabilities, from state-owned enterprises or the financial sector."

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