Malta maintains high credit rating

Malta has retained its A (high) credit rating from international ratings agency Morningstar DBRS, which cited the country's eurozone membership and strong banking sector.

"The affirmation of Malta's A (High) rating with a stable outlook by DBRS is testament to our economy's resilience. Despite worsening global conditions, our strategic decision against austerity is paying off, with strong economic dynamics lowering the fiscal deficit and debt," Prime Minister Robert Abela said.

The ratings agency released its assessment on 10 October, keeping Malta's long-term and short-term ratings at A (high) and R-1 (middle). 

However, the report raised concerns about government spending. Malta's budget deficit stood at 3.6% of GDP in 2024, compared to an average of 2.1% for other EU countries. The deficit is expected to narrow slowly to 3.4% in 2025 and 3.0% in 2026.

The agency said fiscal consolidation has been slowed by new household support measures, including income tax cuts costing 0.5% of GDP, and the continuation of energy subsidies for fuel and electricity. 

These subsidies are forecast to cost 0.7% of GDP in 2025.

Economic growth has begun to slow after strong performance. Real GDP grew by 6.8% in 2024 but slowed to 3.1% during the first half of 2025. The Central Bank of Malta forecasts growth will ease to 3.9% this year, 3.5% in 2026 and 3.3% in 2027.

Tourism continued to perform strongly, with arrivals rising by 12.1% during the first seven months of 2025.

Malta's public debt remains moderate at 46.2% of GDP in March 2025, expected to rise to 48.3% in 2025 and 48.7% in 2026. Around 79% of government debt is held by residents, particularly domestic banks.

The report identified strengths, including eurozone membership, a solid external position, and strong banking sector capital buffers. Malta maintains a large current account surplus of 5.5% of GDP, driven by service exports in online gambling and tourism.

Between 2014 and 2024, strong labour migration increased Malta's population by around 32%, the highest growth rate among EU countries.

The banking sector shows vulnerability due to heavy exposure to the housing market. Loans related to construction, mortgages and real estate accounted for 71.5% of total resident bank loans in August 2025. 

Residential property prices have risen by 29.3% between early 2021 and early 2025.

On governance, the agency noted that Malta ranks in line with EU averages for voice and accountability and rule of law, but compares weakly on government effectiveness and control of corruption.

The EU launched an excessive deficit procedure against Malta in July 2024, requiring the government to bring spending in line with European fiscal rules.