Fitch Ratings on Tuesday reconfirmed Tunisia's Long-Term Issuer Default Rating at 'B-' and maintained a Stable Outlook. The agency's assessment balanced several structural strengths - including GDP per capita and human development indicators that outpace some peers, a diversified economy and an educated labour force - against fiscal vulnerabilities such as high public debt and recurring budget deficits.
External position and current account
Fitch judges Tunisia's external position to be resilient in the face of external shocks, but expects the current account deficit to widen to 3.9% of GDP in 2026. The projected deterioration is driven primarily by higher international energy prices, which are expected to lift the trade deficit despite offsetting factors including a 44% year-over-year rise in olive oil export receipts in the first half of 2026 and a robust performance in the services account.
The rating agency anticipates the current account gap will narrow to below 2.5% of GDP in both 2027 and 2028, on the specific assumption that international oil prices will fall from 2026 levels. In addition, Tunisia fully repaid its sole remaining EUR700 million Eurobond that matured in July 2026, a repayment that the agency notes was facilitated by lending from the central bank.
Fiscal outlook and public debt
Fitch projects the fiscal deficit to widen to 6.4% of GDP in 2026, a substantially larger shortfall than the 'B' median of 3.3%. The agency attributes the increase in large part to a 0.8 percentage point rise in fuel subsidy costs. Fitch also states it does not expect meaningful fiscal reform in the near term and assesses that the government has ceased further consolidation of other current expenditures, with the wage bill specifically cited.
Under Fitch's projections, the fiscal deficit declines gradually through 2028, but remains exposed to swings in international oil prices. Government debt is expected to rise modestly to 85% of GDP in 2026 and to remain broadly stable through 2028 - a level markedly above the 2028 'B' median of 55%. Around 40% of Tunisia's total debt is denominated in foreign currency, exposing public finances to exchange rate risk. The central bank provided zero-interest loans of TND7 billion in 2024, and the 2026 finance bill includes a planned TND11 billion in similar financing.
Prices and growth outlook
Fitch regards inflationary pressures as limited, noting that much of the pass-through from higher international oil prices has been absorbed through fiscal fuel subsidies. The agency forecasts average inflation to rise moderately to 5.7% in 2026 before easing to about 5.0% through 2028, levels it describes as well below the 2022-2024 average of 8.3%.
Real GDP growth is projected to average 2.0% annually over 2026-2028.
Bottom line
The affirmation at B- reflects a judgement that Tunisia's socio-economic indicators and external resilience offset near-term fiscal and debt pressures. However, the balance of risks highlighted by Fitch - energy-price driven external and fiscal pressures, substantial public indebtedness and material foreign-currency exposure - underpin the continued focus on the government's ability to sustain consolidation and manage macroeconomic vulnerabilities.
Summary prepared according to Fitch Ratings' assessment; projections and figures are those reported by the rating agency.