“With this report the Maltese can put their mind at rest that this Government has achieved a sustained economic turnaround and that the country can optimistically look forward to higher economic growth and employment,” said the Minister for Finance Prof. Edward Scicluna.
Prof Scicluna was commenting following the publication of a rating report by international credit rating agency Fitch Ratings on 14th March 2014, which affirmed Malta’s ‘A’ rating with a stable outlook. The report joins other recently-published documents and reports which all confirm that the economy is heading in the right direction.
Indeed Fitch’s conclusion is precisely that “the Maltese economy is on the road to recovery”. This is based on the rating agency’s observation that in 2013 the economic grew by 2.4%, more than double the growth registered in 2012 and well above the Eurozone average. Fitch further remarks that it expects Malta’s GDP growth “to continue outperforming the eurozone average in 2014-15.”
“The fact that Fitch estimates a 2.5% increase in economic growth for this year and the next means that the economy will create more jobs for the benefit of all,” Finance Minister Prof. Scicluna remarked.
Fitch also recognises the effect of the Government’s budget measures aimed at keeping unemployment contained while also encouraging greater female participation, as it remarks that “at 6.5% the unemployment rate is in line with the ‘A’ median and well below the eurozone average, while the employment rate has risen, underpinned by the increasing female labour market participation rate.”
Like the European Commission in its Winter Forecast, Fitch is also recognising the Government’s efforts to rein in the deficit, as it estimates that “the General Government Deficit declined to 3% of GDP in 2013.”
In view of how Fitch’s evaluation of the economy was carried out prior to the announcement of the signing of the Enemalta deal with Shanghai Electric Power Company, the rating agency still recognises the risk posed by Enemalta to this year’s fiscal situation. However, the rating agency acknowledges that “a successful restructuring of the company would allay concerns around crystallization of contingent liabilities.”
The rating agency also recognises that the deal has “the potential to enhance the utility’s profitability over the medium term and reduce its debt.”
Overall, Fitch’s Report represents a positive assessment of the significant progress the Maltese economy registered over 2013, and the results achieved by the Government, especially with regard to reaching the deficit, which the agency has now revised downwards to 3% in 2013.
The Government remains committed to continue strengthening the economy in order to achieve higher growth and employment for all.
– Friday, 14th March, 2014