Ratings agency Moody’s has projected Malta’s economy to grow by 4.2 per cent this year and maintained the country’s A2 negative rating.

In a report issued on Tuesday, the agency praised Malta’s economy for the growth and diversification of its economy, but warned that the significant increase in the Government debt burden and broader economic uncertainty was driving a negative outlook.

The report was welcomed by Prime Minister Robert Abela, who also pointed to recent generally positive reviews by Fitch and the EU’s Spring Forecast.

Moody’s report has predicted Malta’s economy to grow by 4.2 per cent of GDP in 2022 while warning that domestic consumption and investment will be important drivers of growth.

The agency also warned that economic growth would depend, amongst other factors, on the recovery of Malta’s tourism sector and the number of visitors to the islands this year.

It also referenced Russia’s invasion of Ukraine, stating that Malta does not depend very heavily on the country for its energy supplies, and predicted that inflation in the country will remain amongst the lowest in the eurozone.

Looking to the future, Moody’s stated it would be paying attention to Malta’s control of public debt, recovery of its tourism sector, and the country’s status on the Financial Action Task Force (FATF)’s grey list, when deciding future ratings.

Last week, Fitch affirmed Malta’s A+ rating and gave it a Stable Rating.

The ratings agency stated emphasised Malta’s high per-capital income levels, large external creditor position, and pre-pandemic record of strong growth and sizeable debt reduction.

However, it also identified a number of weaknesses, including its large banking sector, the small size of its economy, and a recent decline in public finances related to large fiscal deficits.

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