Standard and Poor’s credit rating report confirms Malta’s BBB+/A-2 long- and short-term rating and reaffirms the outlook of the Maltese economy as stable. This positive assessment that Malta will continue to grow more quickly than the eurozone is being attributed to investments in the energy sector.
These investments are the direct results of government’s economic and energy policies, which have been and are still being disputed by the Opposition.
Standard and Poor’s acknowledges the robust economic growth achieved by the Maltese economy and further highlights that it expects Malta to continue to grow more rapidly than the eurozone as whole, with economic growth expected to equal 3 per cent in 2014 and 2.5 per cent in 2015. This growth is attributed to the investments in the energy sector which, coupled with the reduction in utility tariffs, boosted domestic demand.
The credit rating agency also highlights the increase in household disposable income as a result of rising real wages and broader female participation in the labour market. This is a further confirmation of the positive impact of the policy measures undertaken by this Government.
The Credit Agency also notes positively the huge investment in the energy sector and Government commitment to decrease utility prices for businesses in March of this year.
Standard and Poor’s note the rising real wages in Malta and observe that this has led to an increase in household disposable income.
Despite the fact that S&P says that our key trading partners will face a deteriorating economic activity, Malta’s net exports should continue growing. In fact, S&P are predicting a rebound in Malta’s manufacturing exports. This contrasts with the Opposition’s predictions that manufacturing in Malta is in crisis.
Furthermore S&P are forecasting that the tourism sector and e-gaming, as well as a rebound in microelectronic manufacturing, will continue to be major contributors to economic growth.
On the fiscal front, Standard and Poor’s is also foreseeing a positive outlook. Indeed, it expects the deficit-to-GDP ratio to fall to 2.1 per cent and 2.0 per cent in 2014 and 2015, respectively. This improvement in deficit is being attributed to higher tax receipts as a result of Malta’s GDP growth.
Commenting on these positive results, the Minister for Finance, Edward Scicluna, noted that “in the last administration, government debt as a per cent of GDP had increased by 8 percentage points of GDP. Standard and Poor’s predict that by the end of this administration this increase will have been completely reversed.”
– Saturday, 10th January, 2015