VALLETTA, Aug. 23 (Xinhua) -- Moody's Investor Service has given a positive A3 rating for Malta, in view of its track record on economic growth, income and competitiveness.
The island nation had demonstrated "sustained progress on public sector debt reduction and the prospects for further fiscal consolidation on the back of a buoyant economic performance," Malta's Ministry of Finance said on Thursday.
In a statement issued in reaction to the rating, the ministry pointed out that Moody's has said it will be upgrading Malta's rating to A2 if the country's improvement in fiscal strength is sustained.
Moody's had also noted Malta's recent track record of strong economic growth, an elevated per-capita income and very high scores in terms of global competitiveness.
While Malta's small size and openness make it susceptible to external shocks, it is able come through such difficulties unscathed due to the high level of competitiveness and wealth.
"Malta's institutional strength is deemed 'High' by Moody's, reflecting the country's robust policy framework, enhancements to institutions and policymaking framework of public-sector entities," the ministry said in a statement.
The ministry emphasized Moody's acknowledgment that Malta's fiscal consolidation efforts were reaping rewards, with its fiscal surplus expected to be in the region of 2.5 percent in 2018 and 2019. Together with strong economic growth, Moody's said that this will continue to contribute towards a rapid reduction of Malta's debt-to-GDP ratio.
The rating agency noted that increased numbers of foreign workers and higher female participation in the labour market had contained wage growth.
Although Malta's economic growth is expected to slow down, it is still expected to be strong for this year and the next, the ministry said.
