Malta receives first-time credit rating of A+

Scope Ratings has categorized the Republic of Malta an A+ long-term issuer and senior unsecured local- and foreign-currency rating for the first time.

Scope also gave the island a short-term issuer rating of S-1+ in both local and foreign currency. All Outlooks were categorized as Stable.

The new rating was based on the country’s euro area membership, high economic growth, prudent fiscal management and strong external position, said Scope.

Yet despite relative strengths of Malta’s rating, Scope pointed to hazards from weak state-owned enterprises and supply side constraints induced by a much tighter labour market.

The report noted that Malta is vulnerable to policy harmonisation risks and changes in EU corporate tax law. Skills shortages are forecast to weigh on the country’s longer-term growth potential.

Scope highlighted developments regarding Pilatus Bank and the European Commission’s demand that Malta adopts tougher anti-money laundering measures.

“Scope recognizes that the recent events have no likely impact on public finances but may affect Malta’s reputation of an emerging financial centre,” the agency said in a statement.