wo international credit agencies, Moody’s and DBRS, have given an upgrade in Malta’s economic rating, reports published on Friday show.

In a statement, the government said that after DBRS had improved Malta’s rating last August, the agency has now given Malta an upgrade from ‘A’ to ‘A high’, which is the highest ever rating given to the country.

On the same day, Moody’s revised its rating from ‘A3 stable’ to ‘A3 positive’, which is the first upgrade given by the agency to Malta since October 2013.

The DBRS rating upgrade is a result of improvement in public finances. “Since DBRS’s latest review, the projection of the general government debt ratio has been materially revised downwards due to more favourable growth prospects and stronger primary balances in coming years”, the report says.

DBRS is projecting that Malta’s debt will drop to 41% of GDP by 2022, or seven per cent lower than the previous estimates. DBRS sustain that “the general government is expected to have over-achieved its fiscal targets in 2017”.

‘The Maltese economy continues to power ahead,” DBRS said, while Malta’s economy  “remains one of the top performers in the euro area”. 

DBRS added that “Malta’s political environment is broadly stable” and “the government is making additional efforts to improve governance and strengthen its institutional framework”.

In its report, Moody’s said it chose to upgrade Malta’s rating because of “Malta’s improving fiscal strength, due to a sustained pace of public sector debt reduction supported by prudent fiscal policy and containment of contingent liabilities”.

Moody’s sustain that a surplus of 1.5% was achieved in 2017, as against the 3.5% deficit in 2012. It noted that part of the improvement was a result of the Individual Investor Programme and “fiscal consolidation efforts and sustainably strong economic performance”, which “if sustained, the improvement in fiscal strength will support the assignment of an A2 rating.”

Moody’s also remarked about a “robust medium-term growth prospects supportive of further improvements in fiscal metrics in future.” It added that “measures implemented in recent years targeting the labour market”, kif ukoll “substantial progress has been made in diversifying Malta’s energy sources and increasing energy efficiency.”