Moody’s Investors Service kept Tunisia’s investment grade at Baa3 with a negative outlook, dismissing the risk of a default on its debt in the near future due to international support for the country, reported state news agency TAP.
“The country has been able, despite the difficulties during the year 2012 and especially the recession in Europe, to achieve a recovery and leave the recession,” said Senior Analyst at Moody’s Aurélien Mali, who was quoted in a communiqué by the presidency’s office.
Tunisia has raised enough funds on the international bond market to maintain a sustainable level of its public deficit and external debt, noted Mali.
The North African country has “a public debt-to-GDP ratio of 46% compared to a rate of 68.5% for a country with the same rating like Spain,” he specified.
The international community’s support for Tunisia was taken into consideration by Moody’s, which cited a drop in the interest rate of Tunisian sovereign bonds – maturing in 2020 – from 5.19% to 5.18%. This decrease in the country’s sovereign debt was negotiated on January 4.
The negative outlook of Moody’s rating reflects the risk that Tunisia’s sovereign debt will be downgraded in the next rating if the government does not achieve a timely transition and fails to control public expenditures, said Mali.