Updated at 8.40am with government reaction

Malta’s economic prospects are looking up, according to ratings agency Fitch which on Friday night revised its outlook for the country to ‘positive’.

The agency said it had decided to shift its long-term issuer default rating upwards from the previous ‘stable’ assigned to Malta because it expected GDP growth to remain strong, public finances to remain in surplus and the country’s debt-to-GDP ratio to continue improving.

The country’s issuer default rating was affirmed at the previous A+ status Fitch had set it at.

Fitch’s rating action report of Malta – which was solicited by the Maltese government - highlighted a series of positive indicators as well as some more concerning ones.

It made its assessments based on the assumption that the government would step in to help Bank of Valletta if needed and that HSBC Malta would also be supported by its parent company.

In a statement, the government said that this was the best rating Fitch had ever given Malta. 


  • GDP growth will continue, with Fitch forecasting 5.5 per cent growth this year and 4.8 per cent in 2020.
  • The general government surplus will continue through to 2021, hovering around the 1 per cent mark. Revenue from selling citizenship will continue to decline as a share of GDP, reaching 0.5 per cent in 2020-21.

  • Debt-to-GDP is now 46 per cent when it stood at 70 per cent in 2011. It should fall to 40.3 per cent by 2020.

  • Real estate prices show no signs of overheating.

  • Banks are getting rid of bad loans, which now account for 3.3 per cent of their books, from 7.3 per cent at the start of 2015.

  • Malta's institutional strengths are "stronger than the majority of 'A' rated peers".

  • Increased resources at the FIAU and MFSA “seems to have resulted in a surge in administrative penalties being enforced”, Fitch said.


  • Malta has been “slipping” on World Bank indices related to corruption and democratic accountability.

  • It remains more difficult to do business in Malta than in countries with similar ratings, with Malta ranking only in  the 56th percentile on the World Bank index.

  • Early school-leaving remains high and means Malta still has a large proportion of low-skilled people.

  • Despite improvements, Malta’s gender employment gap remains almost double the EU average – 22.3 percentage points versus 11.5 across the EU.

Question marks

  • Malta’s small size leaves it vulnerable to external shocks.

  • Foreign Direct Investment flows are severely distorted due to the country’s large financial services sector. In 2018, these stood at 79.3 per cent of GDP.

Independent journalism costs money. Support Times of Malta for the price of a coffee.

Support Us