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Energy sector reform welcomed
The credit rating agency Standard and Poor’s has affirmed Malta’s stable outlook with ratings at BBB+/A-2, on 17th January 2014.
In 2013 Malta’s economic growth exceeded expectations. In fact, S&P pointed out that Malta’s strong institutional and governance effectiveness, together with its prosperous economy, boded well for the future.
The ratings agency observed that the Island’s new administration began registering progress on its long-term reforms: ‘Malta’s government has made progress on energy sector reform, a key part of the ruling party’s election promises. If progress is maintained, it will support already-improving economic growth, which appears to have exceeded our previous expectations for 2013.’
The conversion to gas as an energy source will enable the Maltese Government to lower the cost of the generation of electricity by as much as half.
The international credit agency also welcomed the Chinese investment in Enemalta as this will allow the Government to reduce the state-owned corporation’s losses.
S&P expects growth to remain below pre-crisis levels, with real GDP per capita growth averaging 1.8% from 2013 to 2016, versus 3% between 2005 and 2007.
The only factor which S&P criticised was the accumulation of debt by the Government. It pointed out that Malta’s rating would be improved if the Government prioritised economic growth and the reduction of debt.
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