Malta is among the smallest countries in the world and its main strengths are the advantageous geographic position in Southern Europe and its labor force. Its economy relies mostly on tourism, manufacturing and foreign trade, which are attractive for many foreign entrepreneurs wanting to set up a company in Malta. This country changed its currency in 2008, when it switched to euro. Along with the European economic rebound after the financial crisis, Malta’s economy has also increased.
Malta’s credit rating
Usually, credit rating is used by wealth funds, pension funds and other investors to measure the credit worthiness of Malta, thus influencing the country’s borrowing costs. The credit rating is also important for foreign entrepreneurs who open a company in Malta.
The trend is for companies in Malta to ask for credit rating in order to ease their way into trading securities on different markets.
Moody’s, Fitch and Standard & Poor’s, which are three of the greatest credit rating agencies in the world have rated Malta with positive and stable outlooks. According to the Government, Malta was granted a BBB+ rating with a positive outlook by Standard & Poor’s at the beginning of 2016. The other two agencies gave Malta an A rating with stable outlook last year.
These ratings, and most of all the outlooks, were given based on the prospects of an increasing economy by the end of 2018. These expectations are in line with the Government’s efforts to consolidate the country’s economy by putting in place new measures. The country’s general governmental gross debt is also expected to decrease slightly over the next two years.
What will upgrade Malta’s credit rating?
The best news comes from Standard & Poor’s which announced that Malta is highly to outrun the Eurozone this year. Its economy is expected to grow by 2.8% on an annual basis by 2018. The increase will be most likely driven by foreign direct investments, which have increased considerably over the last few years and by a rise in private consumption, according to the credit rating agency.
Other factors to help Malta maintain a positive outlook and a good credit rating score are the higher employment rates and wages and a constant migration flow which will bring a significant increase in investments.