Moodys reaffirms Maltas A2 rating, flags corruption, rule of law concerns
Moody’s warned that unexpected economic support measures, particularly energy subsidies, could negatively impact Malta's public finances
Credit rating agency Moody’s has reaffirmed Malta’s A2 credit rating with a stable outlook, citing strong economic performance and moderate debt levels as key factors.
Moody’s highlighted Malta’s relatively diversified economic base, noting the country’s capacity to outpace growth among peers. The credit rating agency noted Malta’s “fluid labour market” supported by migration, offsetting the effects of the rapidly ageing native population.
The agency flagged physical infrastructure constraints as a challenge, given the island’s growing population and limited resources.
The country's fiscal strength remains solid, with moderate public debt levels and strong affordability metrics, though debt ratios are higher compared to pre-pandemic levels.
Moody’s warned that unexpected economic support measures, particularly energy subsidies, could negatively impact Malta's public finances.
Moody’s also flagged ongoing concerns related to corruption control, rule of law, and the supervision of money laundering risks.
Moody’s affirmed the A2 rating for the $250 million senior unsecured debt issued by Freeport Terminal (Malta) Limited, due in 2028. This debt is backed by unconditional and irrevocable guarantees from the Maltese government, aligning it with the sovereign's credit rating. The outlook for this rating also remains stable.
Moody’s noted that Malta’s fiscal metrics could improve more rapidly than expected if real GDP growth or fiscal consolidation exceeds projections, driven by strong performance in the services sector. Conversely, underperformance in the economy or higher-than-expected subsidies could strain public finances, increasing deficits and debt.
On X, Prime Minister Robert Abela welcomed the rating, highlighting that the credit rating agency forecasts strong growth in the nex three years.
The third positive certificate for Malta's economy in just 8 days. Moody’s note how despite a succession of major international shocks we still managed to grow strongly. Moreover they forecast that between 2019 and 2028 we will grow at twice the rate of our economic peers. - RA
— Robert Abela (@RobertAbela_MT) November 23, 2024
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