Fitch affirms Malta’s credit rating at ‘A+’ with stable outlook

Fitch Ratings has reaffirmed Malta’s long-term foreign currency credit rating at ‘A+’ with a stable outlook, citing the country’s robust growth performance, strong external finances, and eurozone membership.

The rating agency said Malta’s economy remains one of the fastest-growing in the EU, expanding by 86% since 2014 compared to just 14% in the euro area. Average GDP growth has been 6.5% over the past decade, with per capita income now standing at 109% of the EU average. Fitch expects growth of 4.3% in 2025 and 4.1% in 2026, following 6% in 2024.

Employment has also surged, with the labour force reaching 320,000 workers in the first half of 2025, up from 180,000 a decade ago, supported by net immigration and higher participation among Maltese nationals. Unemployment stood at 3.1% in 2024, well below the eurozone median.

On the fiscal front, Malta’s budget deficit narrowed to 3.7% of GDP in 2024, with further reductions expected to 3.0% in 2025 and 2.7% in 2026. Debt levels are forecast to remain stable at around 47% of GDP, significantly lower than the EU’s 60% threshold and the median for similarly rated countries.

Fitch noted that Malta remains under an EU excessive deficit procedure but said strong growth momentum should allow the government to bring the deficit back within the 3% limit by 2025 or 2026, faster than the standard four-year adjustment horizon.

The ratings agency also pointed to Malta’s solid external position, including a current account surplus averaging 7% of GDP and one of the largest net external creditor positions among rated sovereigns. The country’s banking system was described as liquid, well-capitalised, and profitable, with a non-performing loan ratio of just 1.9%.

However, governance challenges remain a constraint. Fitch highlighted a deterioration in World Bank governance indicators since 2013, particularly in government effectiveness and control of corruption. These concerns, coupled with Malta’s small and open economy, leave it vulnerable to external shocks and regulatory changes affecting key sectors.

Fitch said Malta’s rating could come under pressure if public debt rises sharply or if external shocks undermine growth and revenues. Conversely, stronger fiscal performance and meaningful improvements in governance could support an upgrade in the future.