Ratings agency Standard and Poor's said today that it had confirmed Malta's 'A/A-1' Sovereign Credit Ratings and viewed its outlook as Stable.

"We believe that Malta's economy has weathered the global economic crisis relatively well. The Maltese government is addressing the deterioration in its fiscal position as well as structural obstacles to economic growth. The stable outlook reflects our expectation that growth will return to the Maltese economy," the agency said.

It added that downside risks remain, among others from the banking system and state-owned electricity provider, Enemalta.

S&P said it expected that growth would return to 1% this year as external and domestic demand start to recover, but gains in competitiveness were needed to secure high growth rates over the medium term.

"The stable outlook balances our expectation of continued fiscal consolidation against the difficulties of increasing competitiveness in combination with a high debt burden,"

"Risks from Enemalta and the financial sector could put downward pressure on Malta's creditworthiness if plans to reform its business model prove ineffective or if there is a downward revision of property prices.

"As the ongoing restructuring of the traditional economic sectors and the diversification into new services sectors continues, Malta's creditworthiness could improve if the competitiveness of the economy improves in the medium term. A significant decline in the debt burden would also support higher creditworthiness," the agency said.

"Conversely, in the case of sustained and significant fiscal deterioration, or further deterioration in the competitiveness of the economy, the ratings could come under pressure."