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Moody’s reports : Tunisia’s Baa2 foreign-currency Bond rating and stable outlook supported by economic stability but constrained by high debt level

London, 05 October 2005  In its annual report on Tunisia, Moody’s Investors Service says the country’s Baa2 foreign-currency debt rating and stable outlook are supported by the Tunisian economy’s stability and resilience to external shocks. “Although Tunisia’s debt levels are higher than its peers, the structure of Tunisia’s external debt, which is mostly long-term, compares well with other Baa2 countries and confirms the resilience of the country to external shocks or confidence crises,” said Moody’s Vice President Sara Bertin, author of the report. Furthermore, the country still runs a current account deficit, which Moody’s says is expected for a converging economy.

A large part of Tunisia’s current accountdeficit has been financed through foreign direct investment, stabilizing external debt levels. “Tunisia’s current account deficit has been improving for the last few years, thanks to government reforms. However, we are expecting a slight increase in 2005,” said Ms. Bertin. Moody’s expects that further integration within the European Union will have a positive economic and social impact on Tunisia as the country increasingly becomes an export platform for lightmanufacturers into Europe.

The rating agency’s report, “Tunisia 2005Credit Analysis,” is a yearly update to the markets and is not a rating action.

New York
Vincent J. Truglia
Managing Director
Sovereign Risk Unit
Moody’s Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Paris
Sara Bertin-Levecq
Vice President – Senior Analyst
Sovereign Risk Unit
Moody’s France S.A.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Copyright 2005, Moody’s Investors Service, Inc. and/or its licensors including Moody’s Assurance Company, Inc. (together, “MOODY’S”). All rights reserved.

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