Fitch Ratings has affirmed Tunisia’s Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at ‘BB-‘. The Outlook is Negative, the agency said in a statement released on August 26.
The issue ratings on Tunisia’s senior unsecured foreign currency bonds have also been affirmed at ‘BB-‘. Fitch has affirmed the Short-Term Foreign and Local Currency IDRs at ‘B’ and the Country Ceiling at ‘BB’.
Fitch explains the ratings by weak economic growth and elevated security risks and incidents in recent years that have led to a collapse in tourism, an important component of growth and foreign exchange inflows.
There are also turbulent domestic politics, with resignations in January within the leading Nidaa Tounes party that weakened the government’s ability to pass reforms in parliament, prompting the President to call for the formation of a national unity government.
The ratings agency also said it projected GDP growth of 1.2% for 2016, compared with a pre-revolution long-term average of 4.5%, and a ‘BB’ peer median of 3.9%.