Moody’s said it has now completed the periodic review of Tunisia’s ratings.
Regarding the credit profile of Tunisia (issuer rating Caa1), the rating agency said it reflected the country’s “b1” economic strength score capturing a subdued growth potential, “b1” institutions and governance strength which reflects the difficulties in implementing fiscal reforms with respect to control of the wage bill, completion of energy subsidy reform and reform of state-owned enterprises.
Moody’s also points to the increasingly contentious political environment, including in relation with civil society institutions, that weighs on the government’s decision making capacity; “caa2” fiscal strength, reflecting a rigid budget structure, a high debt burden, and a large share of foreign-currency debt, in addition to significant exposures to contingent liabilities stemming from state-owned enterprises; and “b” susceptibility to event risk, driven by government liquidity risk reflecting rising financing risks in view of the government’s significant funding needs.
