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Tunisia’s IMF Agreement Reduces Pressure on Rating, Fitch Says

April 23, 2013

Tunisia’s initial agreement with the International Monetary Fund for a $1.75 billion loan “eases pressure” on the country’s credit rating, Fitch Ratings Ltd. said today.

The stand-by accord “provides crucial underpinning” for the country’s economic program “ and will be an important catalyst for further international support,” Paris-based Director of Sovereigns Amelie Roux wrote in an e-mailed report.

Tunisia, which was cut by Fitch to the highest non- investment grade rating of BB+ in December, reached the agreement with the Washington-based lender April 20. The North African country is seeking to boost economic growth and cut the budget deficit more than two years after the uprising that ended the rule of Zine El Abidine Ben Ali.

The loan “adds comfort to the country’s ability to face its external financing needs over the coming years,” Roux said. “This, together with the easing in political tensions since the forming of a new government in March 2013, somewhat alleviates pressure on the sovereign ratings.”

Economic growth is set to accelerate to 4 percent this year from 3.6 percent in 2012, Finance Minister Elyes Fakhfakh said this month. The government is aiming for a budget deficit of 5.1 percent of economic output this year, the same level as 2012, compared with about 10 percent in Egypt, where an uprising in 2011 ousted President Hosni Mubarak.

The yield on the government’s 400 million euros of 4.5 percent Eurobonds due in June 2020 has dropped four basis points, or 0.04 of a percentage point, since the IMF announcement to 5.2 percent as of 11:01 a.m. in Tunis. That’s the lowest level on a closing basis in more than two months. The IMF agreement is subject to approval by the lender’s executive board when it meets next month.

To contact the reporter on this story: Ahmed A. Namatalla in Cairo at

To contact the editor responsible for this story: Claudia Maedler at

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