Moody’s has wrapped its periodic credit review of Tunisia, affirming the nation’s “Caa1” sovereign rating with a stable outlook despite significant debt repayments. The ratings agency noted that external financing needs have decreased and are now better cushioned by stable foreign currency reserves, which have held steady in recent years.
While Tunisia’s credit profile remains constrained by high public debt and limited fiscal space, Moody’s highlighted bright spots in the external sector. Reserves covered roughly 3.3 months of imports as of June, supported by a 14% surge in foreign direct investment during Q1 2026 and robust agricultural exports. The repayment of a major Eurobond in July 2026 has also eased the external debt maturity profile.
However, the agency warned that fiscal consolidation will likely pause in 2026 due to increased public spending under the new National Development Plan and soaring energy costs. Moody’s assigns the country a “caa1” fiscal strength score, citing spending rigidity.
A future upgrade hinges on accelerated structural reforms and easier access to capital markets, while a downgrade could follow if reserves or domestic liquidity deteriorate. The Central Bank of Tunisia’s rating was also confirmed at “Caa1” with a stable outlook.
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