Standard & Poor's explains its decision: “The dissolution of Malta's parliament on Jan. 7, 2013, will prevent a 2013 budget from being adopted until after the elections set for March 9,thus raising questions about the government's ability to restore the fiscal flexibility it has gradually lost, and resolving the recurrent budgetary risks caused by loss-making state-owned enterprises.”
“Gross general government debt has risen to just above 75% of GDP, and could continue to increase on the back of weaker-than-projected growth or stock-flow adjustments.”
The outlook on the long-term rating is stable as it “balances our view of Malta's relatively wealthy and diversified economy against risks stemming from a narrow economic base, slowly adjusting public finances, and an uncertain growth outlook.”
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