The international rating agency Fitch recently gave Malta the A rating for outstanding performances and future economic outlook. Now the Canadian financial rating agency DBRS has predicted that the economic situation in Malta will get even better and grow by another 3.3% this year. The national debt is estimated to decline to 68% of the gross domestic product. They confirmed the good rating that the American agency Fitch gave Malta previously, but pointed out some room for improvement and some concerns.
The weaker productivity in combination with rising costs for labour can be a challenge for the competitiveness of Malta. Other influences from outside, particularly the EU can also affect the economy negatively. In order to improve the rating further, Malta needs to improve their education system and offer more training for workers. The rating agency also pointed out that most of the companies in Malta are SME’s that do not have much access to investment funds. The government needs to focus on improving Malta’s industrial production, as it has been declining since 2013, and it had a negative impact on the wages of people working in the manufacturing sector.
DBRS praised the efforts of the government relating to incentives for the industry and those related to foreign investments, as well as the restructuring of the public entities, such as Enemalta. Restructuring the company has led to a reduced financial risk for the country.
The positive rating once again shows that Malta’s government is on the right track. The economy is stable, more companies are settling on the island and more jobs are available. The taxation structure, the strategic position and the great economic outlook have turned Malta into a popular alternative for companies who wish to optimise their tax burden and offer services in the European market. If you are interested in company formation in Malta you are welcome to contact the legal office of Dr. Werner & Partner for a personal consultation.
