“Moody's”, the global credit rating agency, downgraded Tunisia's rating to Caa2, which means that the government and the central bank are exposed to high financial risks.
In its report on Tunisia, “Moody's” indicated that the downgrade of the credit rating is due to the lack of comprehensive financing to meet the government's needs, increasing the risk of default. According to the agency, the failure to secure a new financing program by the International Monetary Fund despite reaching a framework agreement with Tunisia in October 2022 exacerbated the difficult financing situation and increased pressure on the country's foreign exchange reserves.
“Moody's” report showed that weak governance and high social risks partly explain Tunisia's reaching such a critical juncture.
Tunisia needs external financing worth $4 billion in order to finance the budget and commit to paying its foreign debt installments. Last December, a report issued by the Ministry of Finance revealed that the public debt has risen to more than 110 billion dinars (about 35.5 billion dollars), which constitutes 80.2 percent of the gross domestic product, compared to 79.9 percent in 2021.
Source (Al-Araby Al-Jadeed Newspaper, Edited)
