Malta’s economic growth rate would be better than the forecast published by the Fitch credit rating agency on Friday evening, Finance Minister Edward Scicluna told The Sunday Times of Malta.

Finance Minister Edward Scicluna

He was reacting to the latest Fitch country outlook report, which forecast Malta’s economic growth would dip to 3.2 from 4.7per cent .

Speaking from the sidelines of a press conference outside the Parliament building, Prof. Scicluna said the high rate of growth experienced last year had been, in no small part, due to spending large chunks of EU funds which would otherwise have been lost.

“We were in a situation where we had to spend millions of euros or risk losing them.

“What Fitch does not foresee, however, is that the government plans to continue injecting public capital into major projects over the course of the next year,” he said, adding that this would see the economy grow at a faster rate than the credit rating agency has forecast.

Overall the report was positive, and gave Malta a “stable” outlook and affirmed its A rating. Prof. Scicluna said an increase in exports was also expected, which was beneficial to the economy and a sign of general growth.

Fitch also gave a positive outlook for Malta’s public finances, with better performances in debt levels and deficit management. The national debt is expected to reach 60.6 per cent in 2017 while the national deficit is forecast to drop to 1.1 per cent of GDP in 2016 and one per cent next year.

Government-guaranteed liabilities on the other hand, remain high at nearly 16 per cent of GDP, the report said.

Prof. Scicluna was quick to point out that after Enemalta’s partial privatisation in 2015, the company had paid off arrears to the government. “The company is expected to return to profitability this year, limiting any additional support from the government,” he said.

Prof. Scicluna said the report had, in line with the government’s plans, highlighted that the health and education sectors could become the “engine” of Malta’s economy.

“The government is planning to invest in these sectors and the potential is being recognised by international rating agencies,” Prof. Scicluna said.