Morningstar DBRS has confirmed Malta’s credit rating at A (high) with a stable outlook, citing strong growth, a moderate public debt burden and a healthy banking sector.

Welcoming the news, prime minister Robert Abela said this affirmation was “testament to our economy’s resilience.”

“Despite worsening global conditions, our strategic decision against austerity is paying off, with strong economic dynamics lowering the fiscal deficit and debt,” Abela wrote on X.

In its latest review, the credit rating agency noted that Malta’s economy is slowing from the rapid pace of recent years but remains among the strongest in the eurozone. Growth is forecast at 3.9% in 2025 and 3.5% in 2026, supported mainly by tourism and services, though weaker external demand and slower job growth are expected to weigh on activity.

The government deficit narrowed to 3.6% of GDP in 2024 and is projected to improve gradually to 3.4% in 2025 and 3.0% in 2026. DBRS warned, however, that energy subsidies and tax cuts are slowing fiscal consolidation, keeping Malta’s deficit above EU averages.

Public debt stood at 46.2% of GDP in March 2025 and is expected to rise only slightly in the coming years, remaining relatively low compared with other euro area countries, according to the credit rating agency.

On the financial front, the agency said Malta’s banks are well-capitalised and continue to report low levels of bad loans. However, it cautioned that banks are heavily exposed to the local property market, where mortgage growth and high prices could pose risks if conditions weaken.

DBRS also pointed to governance concerns, including issues of corruption and institutional effectiveness, while acknowledging progress in reforms. Malta’s small and open economy, it said, remains vulnerable to external shocks despite its strong external position and consistent current account surplus.

Overall, DBRS said the A (high), Stable rating reflects Malta’s resilient economic performance, but warned that persistent fiscal deficits, reliance on foreign labour, and property market vulnerabilities remain challenges for the years ahead.