Updated - Ads Labour Party reaction - Ratings agency Standard and Poor’s has confirmed Malta’s BBB+/A-2 long- and short-term rating and reaffirmed the outlook of the Maltese economy as stable.

"Malta's economic growth prospects remain strong relative to the eurozone,
but we view the government's debt burden as a constraint on policy flexibility," the agency said.

"We consider Malta's domestic banks to be well-capitalized, although we consider that loan loss provisioning levels remain low. We are therefore affirming our 'BBB+/A-2' long- and short-term ratings on Malta.

"The stable outlook balances our view of Malta's economic prospects against its high, though declining, government debt burden and contingent liabilities.

"The ratings are supported by our view of Malta's fairly strong institutions, its resilient economy, and our expectation of further fiscal consolidation. A sizable government debt burden and contingent liabilities constrain the
ratings.

"We estimate that the Maltese economy grew by about 3% in 2014, and we project that it will expand by just over 2% annually on average during the next four years. We believe Malta will continue to grow more quickly than the eurozone as a whole, notably thanks to investments in the energy sector."

The credit rating agency highlighted the increase in household disposable income and broader female participation in the labour market. 

S&P said it also expected a rebound in Malta’s manufacturing exports while tourism and e-gaming would continue to be major contributors to economic growth.

The deficit-to-GDP ratio was expected fall to 2.1 per cent and 2.0 per cent in 2014 and 2015, respectively.  

Finance Minister Edward Scicluna welcomed the report, saying that in the last administration, government debt as a percentage of GDP had increased by 8 percentage points of GDP. "Standard and Poor’s predict that by the end of this administration this increase will have been completely reversed," he said.

The Labour Party in a statement said the Standard and Poor's report was another positive result for Malta which instilled courage and optimism.