Issue link: https://maltatoday.uberflip.com/i/717204
TIM DIACONO MALTA has retained its 'A' rating with credit rating agency Fitch, on the back of strong public finances, strong growth and lower spend- ing. The country is expected to post a deficit of 1.8% of GDP in 2015, with a record high revenue reach- ing 42% of GDP. Reacting to the announcement, Prime Minister Joseph Muscat expressed renewed optimism and said: "Our message is that there is a lot more to be done. The success we have achieved is not the desti- nation, but the point of departure for much greater successes." While underlining the upgrad- ing of Malta's status from "stable" to "positive," Muscat pointed out that Fitch had no local political interests and predicted continuing growth in the economy "where wealth con- tinues to grow and be better dis- tributed among everyone." He said that while the number of youths in employment had risen and that the government had "de- livered a blow" to poverty in the past 10 years, poverty was yet to be defeated. Muscat said that the Maltese and Gozitan people were aware of the increase in job and wealth creation. "We have the fastest- growing economy in Europe, the lowest rate of unemployment," he pointed out. He lauded what he described as the creation of a "new middle- class" through a 40% reduction of dependants on social benefits. "We didn't achieve all this alone, but through a collective effort." Malta set to outperform eurozone members The government is targeting stronger fiscal consolidation up to 2018 through lower spending, but Fitch warned these targets would prove challenging, as the risk of expenditure slippage is high. General government gross debt will fall slightly to 47.2% of GDP. At 16.9% of GDP at end-2014, gov- ernment-guaranteed liabilities are among the highest in the EU and continue to weigh on creditwor- thiness. Most are related to state- owned enterprises, in particular the utility company, Enemalta. "Nevertheless, after the recent purchase of 33% of its assets by a Chinese firm, Enemalta's financial position has started to improve, thanks in part to lower energy imports and new infrastructure investment. This has reduced the risk that contingent liabilities will crystallise," Fitch said. "The Maltese economy will con- tinue to outperform eurozone peers in the medium term, even as GDP growth is set to moderate slightly from 2016 onwards," Fitch said, saying growth will be spear- headed through higher tourist arrivals and the expansion of the gaming industry. But it said that while wages might slightly increase, Malta still retained price competitiveness. maltatoday, SUNDAY, 21 AUGUST 2016 News Malta retains Fitch 'A' rating, Muscat eyes 'greater successes' Aiming for stronger fiscal consolidation