Moody’s Investors Service on Wednesday cut Tunisia’s sovereign credit rating to Ba2, citing political uncertainty and the risk of instability as well as weak finances at government-owned banks and sizeable external pressures on its balance of payments.
In a sign of potentially more downgrades to come, Moody’s assigned a negative outlook to the sub-investment-grade credit.
“Although tensions have declined since the assassination of politician Chokri Belaid and the collapse of Prime Minister Hamadi Jebali’s interim government in February, the risk of a further escalation in political instability remains high,” Moody’s said in a statement.
Tunisia was the first country to stage an “Arab Spring” uprising, inspiring similar revolutions in Egypt and Libya.
The new government is led by a moderate Islamist party, Ennahda, but hardline Islamist Salafists are seeking a broader role for religion, alarming a secular elite which fears this could undermine individual freedoms, women’s rights and democracy.
Standard & Poor’s rates Tunisia one notch lower at BB-minus with a negative outlook while Fitch Ratings has the North African nation one notch higher at BB-plus with a negative outlook.
Reuters
