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Fitch downgrades Tunisia's rating: there is a risk of bankruptcy

The decision by the credit rating agency is weighed down by "the uncertainty with which the country is mobilizing sufficient funds to meet the huge financial needs"


© Agenzia Nova - Reproduction reserved

Credit rating agency Fitch Ratings has downgraded Tunisia's sovereign rating to Ccc-, indicating that the risk of default still exists. Fitch announced it on its official website. The decision reflects "the uncertainty about Tunisia's ability to mobilize sufficient funds to meet the huge financial needs" due to the delay of the Tunisian authorities in concluding a program with the International Monetary Fund (IMF). According to Fitch, Tunisia will reach an agreement with the IMF by the end of 2023, but "it is much later than our previous forecasts and the risks remain high". In the absence of an agreement with the IMF, according to Fitch's note, "about 2,5 billion dollars of external financing can be obtained in 2023 - mainly from Algeria, from the African Import and Export Bank (AfreximBank) , from loans from multilateral partners and from grants from bilateral partners – intensifying financing challenges”.

Last March, Fitch predicted that the first part of the IMF loan, coming from external financing, especially from Europe and the Gulf countries, could be "unblocked within the second quarter of this year, allowing Tunis to avoid debt restructuring and meet the deadlines set for 2023 ($2 billion) and 2024 ($2,6 billion).” In recent months, the IMF had decided to delay the final approval of the maxi-loan of 1,9 billion euros scheduled for December 19, 2022, risking blocking the chain of international financing necessary to avoid the financial collapse of Tunisia. By admission of the director general of resources and balances at the Ministry of Finance, Ibtisam Ben Aljia, Tunisia should mobilize 5 billion dinars (1,47 billion euros) from external loans by the end of the year. And without the first tranche of the IMF, creditors could back down, especially those in the West.

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