Fitch Ratings Raises Tunisia's Rating

(MENAFN- Brazil-Arab News Agency (ANBA)) São Paulo – International credit rating agency Fitch Ratings upgraded Tunisia's rating from CCC+ to B- with a stable outlook in a report released on Friday (12). The agency improved the Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs), a measure of the country's likelihood of defaulting on its financial obligations.

Fitch justified the rating by Tunisia's improved external position, with lower current account deficits, resilient net foreign direct investment, and disbursements from multilateral and bilateral partners. However, the agency noted that the country faces external financing limits, lack of market access, budgetary and external account vulnerability to commodity prices, and a need to reform subsidies.

Fitch Ratings forecasts that Tunisia's current account deficit will rise from 1.5% of GDP last year to 2.2% in 2025 and 2.8% in 2027 due to lower olive oil prices and higher imports. Despite this, the current level remains well below the 7.9% average for 2010–2022. A nation's current account deficit indicates that it spends more on imports than it earns from exports and other international transactions.

However, the agency says net foreign direct investment flows, which amounted to 1.4% of Tunisia's GDP last year, have proven resilient to political and external shocks. While external borrowing is constrained by lack of market access and an absence of an International Monetary Fund (IMF) program, partner disbursements, projected at 2.2% of GDP in 2025, also remain resilient. Fitch expects investment flows in the country to recover in 2025.

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Translated by Guilherme Miranda

©Fethi Belaid/AFP

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