Rating affirmation
Fitch Ratings affirmed Malta’s long‑term sovereign issuer default rating at A+ with a stable outlook on 22 August 2026, citing the island’s robust economic growth, high per‑capita income and membership of the European Union and the euro area, while noting deteriorating governance indicators and the economy’s small size.
Economic outlook
Fitch projects real GDP growth of just under 4 % in both 2026 and 2027 after a 4 % expansion in 2025. Since 2015 the Maltese economy has expanded by a cumulative 90 %, far outpacing the euro‑zone’s 16 % gain over the same period. Per‑capita GDP measured in purchasing‑power‑parity terms reached 110 % of the EU average in 2025, which is 11 percentage points higher than in 2015.
Fiscal position
The 2025 central‑government budget deficit narrowed to 2.2 % of GDP, enabling Malta to exit the EU excessive‑deficit procedure. Fitch expects the deficit to hover around 2 % of GDP throughout the forecast horizon. Gross general‑government debt is projected to stabilise near 46 % of GDP in the 2026‑2028 period, comfortably below the A‑rating median of 57 % and the EU‑defined 60 % ceiling.
Political and governance context
The incumbent Labour Party, led by Prime Minister Robert Abela, secured 52 % of the vote in the snap parliamentary election held in April 2026, marking its fourth consecutive win. World Bank governance indicators fell to the 71st percentile in 2024 from the 84th percentile in 2013, with the control‑of‑corruption component dropping by almost 20 percentage points over the same span.
Labour market
Unemployment stood at 3.1 % in 2025, well below the peer median of 6.3 %. Total employment rose to 330 000 persons in the first quarter of 2026, up from 198 000 in 2015, of which roughly 100 000 workers are migrants. The information‑and‑communication‑technology, tourism and financial services sectors are identified as the main drivers of job creation and economic growth.
Additional notes
The article was produced with AI assistance and subsequently edited by a Reuters editor.