Credit rating agency Fitch is expecting Malta to register above potential growth in 2015-16, averaging 2.5 per cent. This is even higher than that projected by the government in its pre-Budget forecast published earlier this month.

The agency has affirmed its ‘A’ ratings for Malta and said the outlook looks stable. This and other remarks made in its report, as well as an assessment made about the island in the European Commission’s industry competitiveness report, gives the government a break following the set of unfavourable findings in the Doing Business report of the World Bank, and the World Economic Forum’s competitive report, which placed the island six places down in its index when compared with that of the previous year.

This is not a matter of two reports balancing out another two, for the economy is indeed doing well, which is to the country’s credit. All too oftengovernments everywhere tend to take all the credit themselves for any improved economic performance made in their countries. Although they naturally do play a significant role, it is in reality the country as a whole that ought to take most of the credit – the investors and the entrepreneurs, among others, and, most of all, the workers in whatever sector they are employed.

As the credit rating agency has pointed out, gross domestic product growth is outperforming the eurozone average. Last year, it said, the economy grew by 2.9 per cent and in the first half this year, gross domestic product grew by 3.5 per cent, mainly driven by domestic demand, underpinned by the reduction in electricity tariffs and favourable labour market conditions.

The European Commission’s industry competitive report also has some glowing comments about Malta, remarking, for example, that the island has continued to weather the international crisis relatively well. The key word here is “continued”, which means that, contrary to the impression some overzealous Labour politicians try to give, it is not just since Labour came into power that Malta is managing to contain the crisis, but it has been successfully doing so since it broke out.

Although very small in size, Malta has managed to pull through both the financial crisis and the recession that followed. However, it would be wrong if, in the urge to score political goals, warnings, or hints of warnings, given in the reports about Malta are left out of the picture. The European Commission feels, for example, that more should be done to ensure that growth and the economy in general are sustainable.

In its assessment Fitch recognises the fact that, although public finances remain a sovereign rating weakness, they are on an improving trend. The deficit had been brought under control last year, dropping below Fitch’s own projection. However, it warns that fiscal figures on a cash-basis for January-July indicate expenditure slippages, particularly in healthcare, social security, and transport.

Although Fitch does not expect these developments to compromise deficit reduction this year, it warns that continued slippages in public expenditure could pose a risk to public debt reduction should revenues underperform in the future. In so far as public transport is concerned, the government subsidy to the new operator is expected to be considerably higher.

If health presents a major problem, so does social security, which is why the government plans to go on the attack, as it were, to reduce dependence on social welfare and fight abuse.

Reducing the size of Cabinet and keeping control of public sector employment would also be helpful.