Tunisia - Fitch Ratings has downgraded Tunisia's long-term foreign-currency issuer default rating (IDR) to 'CCC-' from 'CCC+', it said in a statement on Friday.

The downgrade to 'CCC-' reflects uncertainty around Tunisia's ability to mobilise sufficient funding to meet its large financing requirement, according to Fitch.

It said in the absence of an IMF agreement, about USD2.5 billion of external financing could be attainable in 2023, but the government's financing plan relies on more than USD5 billion of external financing.

The ratings agency forecast that government financing needs will be high at around 16% of GDP in 2023, amid high risks to the financing plan which is partly dependent on government external borrowing and mostly contingent on an IMF programme.

Foreign exchange reserves will be at risk, Fitch also forecast. It added that though the budget deficit will narrow in 2023 and 2024, stalled progress on reforms and high share of wages and subsidy spending prevent the reduction of budget vulnerabilities to shocks.

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