VALLETTA, Oct. 29 (Xinhua) -- Credit rating agency Moody's reconfirmed Malta's A3 rating and predicted the country's GDP could increase by 2.8 percent in 2015.
The rating agency's report found higher domestic consumption and affirmed that the government fiscal and economic policy is taking Malta in the right direction.
Moody's analysis observed that a large percentage of the government's debt is carried by residents and this minimizes the state's exposure to external shocks.
On the other hand, the rating agency remarked that the government's financial strength was burdened by the island's loss-making energy firm, Enemalta, which carries government-guaranteed debt equivalent to around 10 percent of GDP.
In this respect, Moody's said it was still too early to conclude whether the recent reforms and restructuring measures related to the energy sector would succeed in restoring Enemalta's economic standard.
Moody's report also declared that improved airline connectivity, the restructuring of the tourism sector to meet new customer demand, together with the reduced potential of competing tourism destinations in the Mediterranean would increase the strength of Malta's tourism industry.
According to local reports, Finance Minister Edward Scicluna was encouraged by Moody's positive endorsement of Malta's 2015 draft budget plan that was recently submitted to the European Commission.
Moody's observed that "budget targets appear to be realistic, as they are built on reasonable macroeconomic assumptions and measures that appear socially acceptable for key stakeholders."
Scicluna said the A3 rating with a stable outlook was similar to assessments made by the European Commission, the International Monetary Fund, and other credit rating agencies such as Standard & Poor's and Fitch Ratings.
The minister said these combined assessments confirm that Malta "is on strong economic and fiscal footing, and is well-positioned to again meet its economic and fiscal targets for the coming year."
