Malta has a confirmed A+ rating by Fitch Ratings which means that the agency sees Malta’s Long-Term Foreign-Currency Issuer Default Rating as having a stable outlook.
In its report about Malta, Fitch said that Malta’s ratings come from a balance of “high income per capita, strong governance and human development indicators” when compared to other countries. Other factors include “robust economic growth” as well as eurozone membership and its “large net external creditor position”.
This compared with the large banking sector, the “relatively high government contingent liabilities” and the fact that Malta’s economy is “small and very open” therefore making it vulnerable to shocks.
Fitch said that 153% of the GDP in domestic assets are all in two main banks, making the system “highly concentrated”. “Malta’s domestic banking sector is large, with assets of 224% of GDP in June 2018,” said the report. However, it was pointed out that Maltese banks have still remained “sound and well-capitalised”.
Meanwhile, in terms of reasons for economic growth, Fitch cited “strong private and public consumption” as a driving factor. One thing helping private consumption, according to the agency, are “low interest rates and strong employment and wages”.