Fitch confirms Malta’s credit ratings

Ratings Agency Fitch has affirmed Malta’s long-term foreign currency and local currency Issuer Default ratings (IDRs) at ‘A+’, respectively with both ratings have Stable Outlooks. Fitch also affirmed Malta’s Short-term IDR at ‘F1’ and Country Ceiling at ‘AAA’, which is the common Country Ceiling for the euro area.

Chris Pryce, Director in Fitch’s Sovereign Group stated that “Malta’s rating affirmation reflects its smooth passage through the recession, with limited fiscal damage, demonstrable financial sector resilience and signs of a strong economic recovery”. It was also pointed out that the Maltese banking system did not require any financial assistance from the Maltese government due to the conservative approach to banking and its supervision adopted by the government and the opposition. The agency added that the domestic banks in Malta survived the international banking crisis and recession virtually unscathed.

Fitch stated that Malta also ranks highly in the traditional international governance indicators reflecting stable government, effective civil institutions and lack of corruption, GDP per capita exceeds the ‘A’ rated median. It also remarked that Euro area membership is a source of strength that protects the island from currency crises and limits the impact of its poor record in international merchandise trade. The business and finance sectors were described as “buoyant”, as is foreign direct investment which more than covers Malta’s perennial current account deficits.