Creditreform has affirmed its A+ rating for Malta, while giving the country an upgraded, positive outlook.
The German credit rating agency has been giving Malta a stable outlook since its first rating for the country in 2016.
The Finance Ministry welcomed this latest sovereign rating.
It said in a statement that the upgrade reflected Creditreform’s expectation that Malta will continue to show a strong growth performance with real GDP remaining solid over the next few years, the Maltese labour market continuing to evolve favourably, and the debt-to-GDP ratio remaining on its firm downward path, supported by resilient economic growth and sustained primary surpluses.
The government said that Creditreform has commended Malta’s favourable macroeconomic performance, underpinned by relatively high per capita incomes and buoyant economic growth that is supported by the well-performing labour market.
Creditreform expects growth to continue to outpace most other EU28 members at 4.9 per cent in 2019 and 4.1 per cent in 2020.
Private consumption, which hit the highest growth rate in Eurostat records in 2018, is set to remain the most important growth pillar.
Institutional quality 'generally high'
The credit rating report also assessed Malta’s institutional quality as generally high.
It acknowledged the ongoing government efforts to address the identified shortcomings in the International Monetary Fund FSSA and the Moneyval report, the Finance Ministry said on Saturday.
In September, Times of Malta reported that Malta had failed an expert review of its money-laundering regime, with Moneyval (a Council of Europe body) expressing concerns that law enforcement authorities were not in a position to effectively do their jobs.
"Indeed, it positively notes legislative amendments aimed at strengthening the MFSA’s efficiency and effectiveness and the detailed action plan implemented by the FIAU to enhance its supervisory functions and procedures.
"Moreover, it also acknowledges that the authorities announced a set of measures including the creation of a new agency dedicated to investigating and prosecuting the most serious cases of money laundering and financial crime, as well as the separation of critical functions of the Attorney General," the Ministry added.
According to the government, Creditreform had also noted that accelerating judicial procedures remained a work in progress.
"Nevertheless, it acknowledges the government’s efforts to reduce the time needed to resolve civil, commercial and administrative cases, noting positively that in 2017 the time needed to resolve such cases was reduced to less than half the time needed in 2010."
Healthy public finances in 2020
Creditreform meanwhile expected public finances to remain healthy in 2019 and 2020, with a moderate fiscal surplus reflecting softer but resilient economic activity and government plans to address structural bottlenecks and foster more inclusive growth.
Thanks to robust nominal GDP growth, declining interest expenditure, and sound fiscal policies, gross debt was expected to fall below 40 per cent of GDP by 2021 at the latest, the statement added.