Malta's Economic Strengths Shine as S&P Affirms 'A-/A-2' Credit Rating

S&P Global Ratings has reaffirmed Malta's 'A-/A-2' sovereign credit rating with a stable outlook, highlighting the island nation's robust economic fundamentals.

The ratings agency projects Malta will exit the EU's excessive deficit procedure ahead of schedule, with the government deficit expected to fall to 2.9% in 2026, down from an average of 5.1% over 2021-2024. Strong revenue collections are driving this improvement, putting Malta on track to meet EU fiscal requirements earlier than anticipated.

Malta's debt levels remain remarkably contained, with net government debt hovering around 38-39% of GDP through 2028. The country benefits from highly affordable debt servicing costs, with interest payments occupying just 4.1% of government revenue on average - low by global standards.

Economic growth continues to outpace the broader eurozone significantly. While moderating from post-pandemic highs, Malta's real GDP growth is projected at 3.5% for 2025, nearly triple the eurozone average of 1.3%. Employment growth has remained robust, supporting strong private consumption and tax receipts.

The country maintains substantial current account surpluses, averaging 5.9% of GDP over 2025-2028, driven by booming tourism and thriving service exports. Maltese residents hold a net asset position equivalent to three-quarters of GDP, reflecting the population's strong financial health.

Malta's banking sector remains well-capitalised and liquid, whilst the country benefits from the European Central Bank's monetary credibility as a eurozone member. The nation's high-income economy and competitive export offering continue to attract foreign investment. Indeed, a recent survey by the European Investment Bank (EIB) found that 52% of companies in Malta said their investment efforts were focused on expanding their capacity, double the EU average of 26%. 

S&P noted that authorities have made progress on governance frameworks, with improvements to the judicial system receiving recognition. Malta enjoys one of the lowest effective tariff rates with the United States, particularly benefiting its semiconductor exports.