Moody's: Fixing Tunisia's rating at CAA reflects a high degree of uncertainty (Getty)
Moody's revised its outlook on Tunisia from negative to stable, and kept the country's long-term foreign and local currency rating at CAA2.
Moody's said that adjusting its forecast to stable reflects the agency's view that the pressures facing the Tunisian government will not increase significantly.
The agency added that Tunisia's relatively small domestic financing base and the absence of more external financing from multilateral and bilateral partners are putting pressure on financing, as reported by Reuters.
Moody's pointed out that fixing Tunisia's rating at "CAA" reflects a high degree of uncertainty regarding financing sources amid great needs.
This rating means that Tunisia faces very high credit risk.
Moody's expected that Tunisia's reserves would be subject to a possible drawdown, but they would continue to provide coverage for imports for at least 3 months by the end of 2024.
The agency also expected a similar level of financial assistance from Tunisia's bilateral and multilateral partners to continue even without an IMF program
.
For its part, the Central Bank of Tunisia quoted the agency as saying that the country's credit rating could rise if progress is made in structural reforms.
In January 2023, Moody's lowered the Tunisian government's long-term foreign and local currency ratings to "CAA2" from "CAA1".
At the time, the agency attributed this reduction to its assessment that the lack of comprehensive financing to meet the government’s large financing needs increases the risk of default.
It should be noted that in 2022, Tunisia had reached an agreement at the expert level with the International Monetary Fund regarding obtaining a loan, but it had already defaulted on major commitments.
The government expects that the accumulated public debt in 2024 will reach about 140 billion dinars ($45.17 billion), or about 79.8% of the gross domestic product, up from 127 billion dinars.
Source: Al Jazeera + agencies