The ratings agency Fitch has affirmed Tunisia’s long-term foreign-currency issuer default rating at B- with a stable outlook, while removing the country from its Under Criteria Observation (UCO) list.
Fitch also assigned a RR4 recovery rating to senior unsecured debt, in line with the new sovereign rating assumptions introduced in September 2025.
In its statement, Fitch noted that Tunisia’s long-term external debt rating remains aligned with the sovereign foreign-currency issuer rating. As such, the decision does not amount to an upgrade of Tunisia’s credit profile, with the rating unchanged from that confirmed on September 12, 2025. The exit from the watch list primarily reflects a technical adjustment linked to changes in Fitch’s analytical framework, rather than any significant macroeconomic or fiscal shift.
The assessment is largely grounded in governance and sovereign risk considerations. Fitch assigns Tunisia an ESG Relevance Score of 5, indicating that political stability, civil rights, the rule of law and institutional quality exert a markedly negative influence on the rating. The country ranks in the 36th percentile of the World Bank’s governance indicators, pointing to weak political stability, limited participatory rights and only moderate institutional capacity.
On default risk, the agency considers recovery prospects in the event of a restructuring to be average. The absence of clearly identifiable mechanisms to protect sovereign creditors underpins the RR4 recovery rating, which, according to Fitch, does little to enhance Tunisia’s attractiveness to international investors.
The conditions for a potential upgrade remain stringent and unchanged. Fitch said an improvement would only be conceivable if there were a sustained reduction in the fiscal deficit and the public debt-to-GDP ratio, alongside a continued build-up of foreign exchange reserves supported by regular and credible access to external financing. Conversely, failure to rein in the government’s financing needs or increased pressure on external accounts could trigger a downgrade, particularly in the event of reserve depletion or a significant currency depreciation.
Ultimately, the decision—presented by the authorities as a signal of stabilisation—primarily underscores the persistence of Tunisia’s structural vulnerabilities. The confirmation of the B-rating reflects a status quo: elevated sovereign risk, now reassessed under a revised methodological framework, but without any tangible improvement in economic or institutional fundamentals.
MK/ak/lb/as/APA