Moody's Maintains Tunisia's Sovereign Rating at "Caa1" with a Stable Outlook
Moody's has completed its periodic review of Tunisia's sovereign rating. The verdict was made public in late July, with no changes to report, as Tunisia's rating remains at "Caa1" with a stable outlook. While there are no surprises, the agency took the opportunity to provide a comprehensive assessment of the Tunisian economy, which is not very reassuring.
Reserves Hold Up Despite Energy Bill
According to Moody's report, between January and May 2026, the energy import bill increased by 38% year-over-year, driven by rising oil prices. However, the country's foreign exchange reserves have withstood the shock, maintaining a level of around 3.3 months of import coverage as of June. This can be attributed to the good performance of agricultural exports, a steady flow of remittances from the diaspora, and a 14% year-over-year increase in foreign direct investment (FDI) in the first quarter.
Another notable fact is the repayment of the last major eurobond last month, which has resulted in a more comfortable debt repayment schedule for Tunisia in the coming years.
Budget Takes a Pause
On the public finance front, Moody's mentions a "white year" for budget consolidation, hindered by the increase in public sector wages and the launch of the first projects under the 2026-2030 National Development Plan.
Energy subsidies, which account for 20% of public expenditure in 2025 (6.8% of GDP), remain the number one vulnerability; the structure of public expenditure, which is too inflexible, is even considered the central weakness of Tunisia's financial profile.
Implications for Investors
For economic actors, this confirmation of the rating, without downgrade or upgrade, sends a signal of short-term stability, without lifting the underlying uncertainties. The maintenance of a stable outlook, backed by the resilience of reserves and the dynamics of FDI and diaspora transfers, provides a predictable framework for operators already engaged in the Tunisian market.
However, the budget rigidity and the weight of public debt continue to impact the cost and access to external financing, a parameter to be closely monitored for any medium-term investment project. Moody's also notes that the rating of the Central Bank of Tunisia, responsible for issuing and repaying debt on behalf of the state, remains unchanged at "Caa1" with a stable outlook.
