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Fitch downgrades Tunisia over financial crisis

2023-06-10T07:02:21.586Z

Highlights: Tunisia was already among the countries with real risks of non-reimbursement, according to Fitch. Government budget depends on more than $5 billion in external financing (10% of GDP) that will not be released until there is an agreement with the IMF. President Kais Saied rejects any "foreign diktat" that could in any way undermine "social peace" Fitch's downgrade comes on the eve of European Commission President Ursula von der Leyen's visit to Tunisia.


'The international rating agency Fitch Ratings has lowered the default rating of the long-term issuer in Tunisia's foreign currencies from CCC+ to CCC- , due to delays in negotiations to obtain a new loan from the International Monetary Fund (ANSA)


"The international rating agency Fitch Ratings has lowered the default rating of the long-term issuer in Tunisia's foreign currencies from CCC+ to CCC- , due to delays in negotiations to obtain a new loan from the International Monetary Fund (IMF).

This downgrade of the North African country's long-term debt rating "reflects the uncertainty surrounding Tunisia's ability to raise sufficient funds to meet its substantial financial needs," Fitch said in a statement.

Tunisia was already among the countries with real risks of non-reimbursement, according to the institute. "Our main scenario is for an agreement between Tunisia and the IMF by the end of the year, but it is much later than we previously expected and risks remain high," Fitch said. The agency recalls that the government budget depends on more than $5 billion in external financing (10% of GDP) that will not be released until there is an agreement with the IMF.

Fitch's downgrade comes on the eve of European Commission President Ursula von der Leyen's visit to Tunisia on Sunday with the leaders of Italy and the Netherlands for talks with President Kais Saied focused on migration and the economy. "A cooperation agreement in the fields of economy, energy and migration will be at the heart of the discussions," von der Leyen's spokesperson said. Eric Mamer. Tunisia has been in difficult negotiations with the IMF for many months to obtain a new loan of 1.9 billion dollars, but President Kais Saied rejects any "foreign diktat" that could in any way undermine "social peace". Among the reforms recommended by the Fund, in an agreement never made public by the parties, there would be the restructuring of more than 100 heavily indebted public companies and the revocation of state subsidies on some basic products. Italy's Prime Minister, Giorgia Meloni, also called for an agreement between the IMF and Tunisia, considered "fundamental for the strengthening and full and complete recovery of the country".

Source: ansa

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