Scope confirms Malta's A+ rating with a stable outlook

Malta has had its A+ credit rating confirmed by Scope Ratings, with the agency keeping the country’s outlook stable.

The agency also confirmed Malta’s short-term issuer rating at S-1+, according to a report published on May 15.

Scope said Malta’s rating was supported by “robust economic momentum,” strong growth potential relative to European peers, a record of prudent fiscal management, and moderate government debt.

It noted that the Maltese economy continues to benefit from strong consumption, a buoyant labour market, rising real incomes, and supportive fiscal policy.

Export-oriented sectors, particularly tourism and other services, were cited as strengths, alongside a tax regime that continues to attract foreign companies.

However, the agency warned that Malta faces the challenge of moving away from its current growth model, which is driven heavily by labour expansion, and towards one based more on productivity gains and capital investment. 

“Growth is projected to moderate but remain significantly above the peer average,” Scope said.

The report forecasts real GDP growth of 3.6% for 2026, followed by 3.8% in 2027 and 4% in 2028. Malta’s economy grew by 6.2% in 2024, with an estimated growth of 4% for 2025.

A closer look at the report indicates Malta was close to being assigned a higher AA- rating but had that adjusted downward by one notch to A+ to account for qualitative factors. 

Scope noted that while Malta's fiscal position is improving and it expects the country to exit the EU’s Excessive Deficit Procedure this year, “persistent institutional challenges” remain and governance indicators sit below those of rating peers.

The agency explicitly categorised governance as “weak,” applying a -1/3 notch adjustment in their ESG assessment.

Debt and risk factors

Government debt is projected to decline gradually, falling from 46.4% of GDP in 2025 to 39.4% by 2031. The agency cited strong nominal growth, an improving primary balance, and contained interest costs as the drivers for this trend.

Various risks remain, though. Malta remains a small, open, and resource-constrained economy, leaving it dependent on external demand and inflows of foreign workers. Energy subsidies, an ageing population and government guarantees to state-owned enterprises are also risks to the downside, it said. 

The stable outlook reflects Scope's view that risks to the rating are currently balanced.

Malta could be upgraded if it undertakes structural reforms to support economic diversification, or if fiscal consolidation leads to a faster-than-expected decline in public debt.

Conversely, a downgrade could occur if growth prospects deteriorate, the fiscal outlook weakens significantly, or if institutional fragilities re-emerge to threaten Malta’s economic attractiveness.

In a statement, the Labour Party noted that Scope had confirmed Malta's A+ rating on the same day that it downgraded Poland's credit rating. 

"A Labour Government is a guarantee of stability and success. In such difficult times, only a Labour Government can ensure that our economy continues to perform strongly and deliver improvements in the wellbeing of our families," it said.