VALLETTA — In its latest evaluation, Fitch Ratings has upheld Malta’s A+ credit rating with a stable outlook, acknowledging the country’s robust economic performance while also cautioning about future fiscal risks.

According to Namibia Press Agency, Fitch’s report, published on Saturday, detailed Malta’s economic progress, projecting a significant 5.7 percent GDP growth for the year—markedly higher than the Eurozone’s 0.8 percent and 2 percent among other A-rated nations. This growth is largely attributed to the success of Malta’s service and financial sectors, along with a resurgence in its tourism industry. Fitch’s analysis recognized these sectors as key drivers of the nation’s economic expansion.

Despite the strong economic indicators, Fitch expressed concerns over structural issues that could impede long-term growth. The labor market, while experiencing low unemployment rates at 3.2 percent—well below the Eurozone average of 6.5 percent—is facing challenges like skill shortages and low productivity levels that may affect future economic stability. Additionally, the report discussed Malta’s fiscal outlook, forecasting a reduction in the fiscal deficit from 4 percent of GDP in 2024 to 3 percent by 2026. This comes as Malta navigates the EU’s excessive deficit procedures, which were adjusted earlier this year.

Fitch also highlighted concerns regarding the Maltese government’s fixed-price energy policy, noting the absence of a definitive strategy for its conclusion. The national debt ratio, which stood at 47.3 percent of GDP at the end of 2023, is expected to climb to 49.6 percent by the end of 2024. Looking ahead, the rating agency suggested that an upgrade to Malta’s credit rating might be possible with sustained fiscal consolidation and debt reduction. Conversely, risks of a downgrade could arise if government debt increases, economic growth decelerates, or regulatory and tax changes deter foreign investment.

Prime Minister Robert Abela reacted positively to the reaffirmation of Malta’s credit status, highlighting the country’s economic momentum on social media and outlining plans to reduce taxes and maintain energy subsidies while still cutting the deficit.