Malta’s economic growth proved ‘sustainable’ - Finance Minister

Finance Minister Edward Scicluna welcomed Fitch Ratings which affirmed an A rating, arguing that the island's economic growth proved to be sustainable.

“Fitch’s latest ratings confirm Malta’s economic growth as sustainable and geared to keep outperforming other EU states on GDP growth and employment,” Scicluna said.

On Friday, global ratings agency Fitch affirmed Malta at ‘A’ with a stable outlook. Fitch said that Malta’s economy had grown by 2.9% in 2013, better than 2012 (1.1%) and higher than the eurozone average (-0.4%). They said that this economic growth was largely driven by increased consumption after electricity bills were reduced. They also predicted that Malta’s economic growth will continue outperforming the eurozone average.

Fitch also said that “at 5.7% in July, Malta’s unemployment rate is below both the ‘A’ median and the eurozone average, while the employment rate has risen, largely thanks to more females entering the labour market.”

Fitch also praised the government for reducing its deficit-to-GDP ratio to below what Fitch itself had expected in its latest rating review. Fitch had projected the deficit to decrease to 3% in 2013, while the government managed to reduce it to 2.8%.

“Fitch projects the deficit to decline further to 2.5% of GDP in 2014 and 2015,” Scicluna said. “The government is confident that Malta will again exceed the expectations of international institutions with regards to the deficit-to-GDP ratio.”

“We remain committed to reducing the deficit to 2.1%, as targeted in the 2014 Budget.”

“Fitch’s latest rating report confirms that the country’s economic growth is on a path which will continue to outperform on the basis of GDP growth and employment,” Scicluna said. “Its public finances are also expected to improve in the coming years.”

“This result has been boosted by the Government’s budget measures aimed at strengthening economic growth, generating quality employment, and ensuring the sustainability of public finances. The Government is looking towards the coming budget as an opportunity to build upon these successes,” he said.

Meanwhile, the Labour Party also praised Fitch’s latest credit ratings.

“Malta is no longer a country that follows other countries’ leads but has become a pioneer,” the PL said. “These credit ratings emerged despite the Opposition’s several negative predictions about the economy under a Labour government.”

“This government is obtaining results. Malta is moving forward.”