Tunisia-Fitch Downgrades Tunisia to ‘CCC’

Fitch Ratings has downgraded Tunisia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘CCC’ from ‘B-‘.

In a press release ,the agency said”The downgrade to ‘CCC’ reflects heightened fiscal and external liquidity risks in the context of further delays in agreeing on a new programme with the IMF after the political changes of July 2021, which is necessary for access to most official creditors’ budget support. The entrenched social opposition and on-going friction with unions curtail the government’s ability to enact strong fiscal consolidation measures, complicating efforts to secure the IMF programme.”

“Along with higher commodity prices, slow reform implementation could lead to a situation where debt restructuring is required for debt sustainability, even under an IMF programme. However, the government has firmly stated that it is not considering a debt restructuring and Tunisia has never engaged in a Paris Club treatment”,adds the agency.