Malta has maintained its A2 credit rating with a stable outlook, Moody’s said in its latest rating action on Friday.

The rating took into consideration Malta’s fast-growing, relatively diversified economy and its ability to balance the pressures caused by an ageing population by importing foreign labour.

But, the agency warned, the influx of workers was adding pressure to the country’s infrastructure and Malta continued to face challenges related to the rule of law, corruption and anti-money laundering.

Moody’s analysts said that a succession of shocks over the years “hasn't affected Malta's ability to grow strongly” and noted that of summer, the country’s GDP was 25.4% higher than it was in the pre-pandemic period – the strongest performance in the Eurozone.

Compared to the A2 median, Malta's economy is “significantly smaller and more volatile, but also both much wealthier and faster-growing (4.5% on average between 2019 and 2028 against 2.3%),” it noted.

The agency took note of the government’s aim of refocusing Malta’s economy on more capital and knowledge-intensive industries, to help ease pressures caused by massive influxes of foreign workers.

But, it said, any such change “is likely to materialize only gradually.”

Moody’s said Malta’s public finances are a “strength”, despite its debt-to-GDP ratio being above pre-pandemic levels. It said it expects the country to keep to its deficit reduction targets and that a growing economy and improved tax collection would help bolster government revenues.

It praised the government’s management of national debt as “prudent” and said that, coupled with the fact that 80% of debt was in euros and held by locals, helps protect the government from an abrupt rise in interest payments.

Concerns related to an ageing population were also not a major issue for analysts, who noted that the country’s old-age dependency ratio (the share of people aged 65 and above over the population aged 20 to 64) will be roughly stable over the next two decades as a result of immigration and employment rates.

In its report, Moody's also said it was reaffirming an A2 rating for $250 million in backed unsecured debt owed by Malta Freeport Terminal, given that the debt is backed by unconditional and irrevocable government guarantees. 

Prime Minister Robert Abela reacted positively to the report. 

"Moody’s note how despite a succession of major international shocks we still managed to grow strongly," he wrote on X. "Moreover they forecast that between 2019 and 2028 we will grow at twice the rate of our economic peers."