Ratings Agency Moody’s, Monday, lowered Tunisia’s issuer rating by one notch to Ba3, which is three levels into junk territory.
Moody’s, which already issued a downgrade in May, said the latest cut was in part due to a lack of timely progress toward the completion of a constitution and a timetable for elections.
Increased violence, meanwhile, weighs on Tunisia’s investment climate and hurts the tourism industry, which Moody’s said is a key economic sector and a source of employment.
Moody’s listed a number of additional factors that led to the weaker rating, including sizable deficits, some donor funding cutbacks because of the slow reform progress, and the fragile state of the Tunisian banking sector.
Moody’s kept its rating outlook on Tunisia negative, reflecting the challenging political situation and sizable financing pressures.