Scope confirms Malta's A+ rating, but watch out for that ageing population

Malta has retained its A+ credit rating with a stable outlook in an assessment released by rating agency Scope released on Friday. 

The Germany-based agency said that Malta’s strong growth potential, Eurozone membership and track record of reducing public debt all boded well for the country’s economic future.

But it tempered enthusiasm by noting that the country’s rapidly ageing population, reliance on foreign demand and “lingering institutional and administrative deficiencies” related to regulatory oversight and good governance could all prove to be stumbling blocks in the years to come. 

Its A+ peers range from France to Bulgaria, Spain, Slovakia and Japan.

Strengths

The report noted Malta’s high GDP growth and low unemployment figures, saying inflation also remained contained when compared to its peers, thanks to “forceful” government intervention to cap energy prices. 

Scope expects the country to trim its deficit and debt-to-GDP metrics in the years to come, after they both ballooned during the COVID-19 period. Interest payments on national debt will remain below 1.2 per cent of GDP over the forecast horizon, despite rising interest rates, and 86 per cent of debt is...