A press statement by the government states that Malta has remained in the ranking of A + countries in the report just published by Fitch Ratings. This international agency has confirmed that the outlook for our country’s rating has remained stable despite the negative impact of the pandemic that is constantly being reviewed around the world.
In fact, since the outbreak of Covid-19, this agency has reduced the prospects of Belgium, France, Latvia and Romania from stable to negative, while the status of the United Kingdom has been downgraded from AA to AA- with a negative outlook. Slovakia’s rating has been downgraded from A + to A.
Fitch Ratings experts, as well as those of the IMF and the European Commission, are predicting that, despite our country’s dependence on industries such as tourism, the impact of Covid-19 on Malta will be less negative than that in the euro area. They claim that the economic performance of our country will be 2.1 percentage points better than the euro area average in 2020. While in their previous update Fitch experts were uncertain about their forecasts for our country, they now claim that “we now believe the risks are more balanced”.
The report states that “Malta’s medium-term potential growth remains strong and well above the euro area average”. This means that the impact of the pandemic may be temporary and will not affect the economic potential of our country due to the strong support from the Government during the pandemic, which, according to Fitch Ratings, accounts for more than 10% of the national wealth.
International experts predict that, within two years, a “rebound in economic activity” is expected to bring the deficit created to support government measures back to the level set out in the Maastricht Treaty. It should be noted that Fitch experts say that the burden of the national debt will not exceed 60% of national wealth, i.e. it will remain well below the level of 2012.
The report projects that despite the lack of external demand, Malta will continue to export rather than import. Fitch Ratings experts are also confident about the strong liquidity of Maltese banks.
This analysis is another positive certificate on the economic performance of our country. The statement concludes by saying that against the negativity and fear that some have tried to spread, several international agencies are confirming a stable outlook for our country and predicting a less negative impact than the rest of the eurozone. This trust is to be the basis on which the government will lead our country towards a great economic and social regeneration for a ‘Better Tomorrow’.