Fitch Ratings has affirmed Tunisia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘CCC-‘, it said in a statement on December 8.
The rating reflects the “heightened uncertainty around the government’s ability to meet its large budget financing needs – revised up in the absence of progress on key subsidy reforms – and increasing debt maturities,” the rating agency said.
It added that the affirmation balances its revised assumption that an IMF program is unlikely to be reached in 2024 with the better than expected resilience of international reserves despite the limited availability of external funding.
Fitch also indicated that it expected fiscal financing needs to be consistently at or over 16% of GDP (over USD8 billion) per year in 2023-2025 compared with 14% (about USD6 billion) in 2022, and well above the 2015-2019 average of 9%.
“This is one of the highest among ‘CCC+’ or lower peers. This results from persistent wide budget deficits, and increasing domestic and external debt maturities, at about 10% of GDP per year in 2024-2025,” it pointed out.
