Fitch Maintains Tunisia’s Credit Rating Amid Mixed Economic Outlook
International credit rating agency Fitch confirmed Tunisia’s long-term foreign-currency issuer default rating at “B-” with a stable outlook on Tuesday, September 8. This decision reflects a mixed assessment: while Tunisia retains significant strengths in its economic structure and external revenue streams, its public finances continue to face considerable pressure.
Economic Resilience and External Strengths
Fitch highlights the resilience of Tunisia’s external position. The Tunisian economy benefits from:
- Diversification: A more diversified economic base compared to peers.
- Higher Income Levels: A GDP per capita that exceeds that of several other countries in the same rating category.
- Skilled Workforce: A relatively qualified labor force.
External revenues have also provided some relief. In the first half of 2026, olive oil exports surged by 44% year-on-year, while the services sector continued to support foreign currency inflows. This dynamic helped absorb part of the pressure from rising energy import costs.
Current Account and Debt Challenges
Despite these positives, Fitch projects that the current account deficit will widen this year. The agency forecasts a deficit equivalent to 3.9% of GDP in 2026, driven largely by higher energy prices. However, Fitch expects this deficit to narrow to less than 2.5% of GDP in both 2027 and 2028.
Tunisia successfully met a major external debt obligation in July by repaying a €700 million eurobond. For Fitch, this ability to service external debt remains a key factor supporting the country’s credit rating.
The primary area of concern remains the state budget. Fitch projects a public deficit of 6.4% of GDP in 2026. Rising fuel subsidy costs are weighing heavily on public accounts, leaving state finances exposed to fluctuations in international oil prices.
Public debt is expected to reach 85% of GDP this year, significantly higher than the 55% median observed among countries in the same rating category. With approximately 40% of this debt denominated in foreign currencies, any depreciation of the Tunisian dinar could further increase the debt burden in local currency terms.
Financing Needs and Central Bank Role
Fitch closely monitors the state’s financing needs, estimating them at 13.5% of GDP by 2028. Financing from the Central Bank has already played a significant role, with loans totaling 7 billion dinars in 2024 and 2025, and a new financing package of 11 billion dinars planned for 2026.
However, this mechanism is not expected to continue at the same pace. Fitch anticipates that central bank financing will cease in 2027, which could push the state to rely more heavily on the domestic market. Consequently, net domestic borrowing is projected to rise from 1.7% of GDP in 2026 to 6.5% in 2027, according to the agency’s forecasts.
