Fitch affirms Malta's 'A+' rating, keeps outlook stable

Fitch Ratings has affirmed Malta's long-term credit rating at 'A+' with a stable outlook, citing strong economic growth, high income levels, and EU membership as key supports.

The agency said Malta remains among the best-performing economies it rates. "Malta has one of the strongest growth performances among Fitch-rated sovereigns," Fitch said in its report, published on 21 August 2026.

The economy has expanded by a cumulative 90% since 2015, against growth of just 16% across the euro area over the same period, according to the agency. Average annual growth over that stretch stood at 6.5%, well above the typical rate for countries in Malta's rating category.

Prime Minister Robert Abela welcomed the affirmation. "Despite global uncertainty, Fitch reaffirms Malta's A+ rating, noting that in 10 years our GDP per capita has exceeded the EU average by 10%. A strong economy means we can keep energy and fuel prices stable, limiting inflation, while still lowering the fiscal deficit," Abela wrote on X.

However, Fitch noted that Malta's governance indicators have worsened markedly over the past decade, with the country's World Bank ranking falling to the 71st percentile in 2024 from the 84th in 2013. Control of corruption recorded the steepest decline, dropping almost 20 percentage points.

In the labour market, employment has surged, with the number of employees rising to 330,000 in the first quarter of 2026, up from 198,000 in 2015.

 Around 100,000 of the increase came from workers arriving from abroad, while roughly 30,000 reflected greater participation among the Maltese population. Unemployment stood at 3.1% in 2025, well below the typical rate of 6.3% for comparable economies.

The budget deficit, meanwhile, has been narrowing. It fell to 2.2% of GDP in 2025, down from 3.4% in 2024 and 4.4% in 2023, allowing Malta to exit the EU's excessive deficit procedure. Fitch expects the deficit to hold at around 2% of GDP in the coming years.

However, the agency flagged the cost of Malta's energy subsidy scheme, which keeps electricity and fuel prices fixed for households and businesses. This could reach €230 million in 2026, close to 1% of projected GDP, and around €200 million the following year.

Government debt is forecast to settle at roughly 46% of GDP between 2026 and 2028, comfortably below both the typical rate for Malta's rating category, at 57%, and the EU's 60% threshold.

The report also touched on April's snap election, in which the governing Labour Party, led by Prime Minister Robert Abela, secured a fourth consecutive win with 52% of the vote. The opposition National Party, now led by Alex Borg, increased its share to 45%, up from 42% in 2022.

Malta's banking sector was described as resilient, with strong capital buffers and improving asset quality. The share of non-performing loans fell to 1.7% by the end of 2025, in line with the EU average, though Fitch pointed to remaining pockets of risk tied to banks' exposure to construction and real estate