Updated Saturday, 8.30am, with minister's reaction

Malta has retained its A- long-term rating with international rating agency Standard and Poor's.

The US financial services company cited Malta's "strong growth performance coupled with consistent current account surpluses, as well as by narrowing government deficits and improved fiscal management" in its decision to keep Malta within its A- bracket. 

It said the country's outlook remained stable, with the country's economic performance counterbalanced by risks related to service exports, the size and structure of Malta's financial services industry and potential Brexit fallout. 

S&P Global Ratings noted that the country's macroeconomic growth continued to outpace the Eurozone average and approved of both the interconnector and switch to gas-generated power, saying this brought "higher capacity and lower prices". 

The agency approvingly noted that more women had entered the workforce and said that inward migration had also bolstered labour supply. 

It predicted that GDP would grow by an average of 3 per cent a year between now and 2020, with government debt reaching 47 per cent of GDP by that date. 

The agency said that although Brexit fallout could affect Malta, the country appears to be "generally well-placed to withstand Brexit shocks". 

It nevertheless warned that Malta's tax regime faced increasing external pressure at both European and global levels. 

Last October, S&P had upgraded Malta's long-term rating for the first time in two decades, citing "improved credit metrics" as the reason for shifting Malta's rating up to A- from BBB+.

Government deserves to be proud - minister

Finance Minister Edward Scicluna welcomed the latest credit rating report, saying that Malta continues to enjoy one of the strongest macroeconomic expansions in the eurozone.

It positively noted that the significant investment projects in energy, healthcare, education, and hospitality in the last three years as important drivers of growth. These sectors are also expanding base for further future export growth.

Standard and Poor's comments positively on Malta's fiscal management stating that it has improved as Malta has made considerable progress in fiscal consolidation.

Prof. Scicluna said: "This report comes on the morrow of the NSO statistical report on Malta's public finances whereby Malta achieved a surplus in 2016 after 35 consecutive years of deficits. The government deserves to be proud of these achievements.”

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