World Economy

Fitch Retains Malta Rating

Fitch Retains  Malta RatingFitch Retains  Malta Rating

Fitch Ratings has affirmed Malta’s long-term foreign-currency issuer default rating at ‘A+’ with a stable outlook. It said the country’s ratings reflected its high income per head compared with the ‘A’ median, robust economic growth and a large net external creditor position, together with eurozone membership, MNA reported. Malta’s ratings, Fitch said, were constrained by the small and highly open nature of its economy, which made it vulnerable to external shocks, and its high, albeit declining level of contingent liabilities and outsized banking sector relative to GDP. Domestic banks’ assets accounted for 225.7% of GDP in December 2017 and Malta’s large international banking sector was not exposed to the domestic economy. Earlier this week, credit ratings agency Standard and Poor’s highlighted increased reputational and operational risks for Malta’s banking sector, moving its risk score up two notches on its 10-point scale. Fitch forecast Malta would maintain a fiscal surplus of 1% of GDP in 2018, after outperforming its fiscal target by 3.1pp in 2017 with a surplus of 3.9% of GDP due to large tax revenues and proceeds from the Individual Investor Program and lower than expected capital expenditure.


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