Fitch Ratings has downgraded Tunisia’s Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) to ‘B+’ from ‘BB-‘. The Outlook is Stable. The issue ratings on Tunisia’s senior unsecured bonds have also been downgraded to ‘B+’ from ‘BB-‘.
The agency explained this by “the collapse of tourism in the context of elevated security risks, slowdown in investment amid frequent government changes and episodes of strikes and social unrest have weakened economic growth performance and prospects, with negative spill-overs to external and public finances.”
Fitch projects GDP growth of 2.3% in 2017 and 2.5% in 2018.
“the government will need to borrow the equivalent of 7% of GDP externally (in addition to 2.8% of GDP in domestic market financing) to meet its amortization and budget needs in 2017,” Fitch estimates.