Fitch rates Tunisia eurobond BBB

Fitch Ratings said it has assigned the Republic of Tunisia's forthcoming eurobond a long-term foreign currency BBB rating.

The outlook is stable.

The bond is expected to be euro-denominated and carry a maturity of seven years. The issuance amount is unknown at this time.

Fitch said the Tunisian economy continues to deliver strong growth. GDP growth is estimated at 5.8% for 2003, driven by strong agricultural output and buoyant export performance, despite weak growth in its key European markets.

Solid growth has allowed the authorities to continue to pursue gradual fiscal consolidation, and as a result an ongoing reduction in the large public debt burden, which is estimated to have ended last year below 60% of GDP. Fitch expects more of the same for 2004.

Despite solid economic growth, the current account deficit narrowed slightly during 2003, closing the year at an estimated 2.5% of GDP. Net external borrowing remained quite high as the government sourced much of its borrowing from abroad, but given solid economic growth and a strong exchange rate (relative to the U.S. dollar) external debt to GDP moderated last year to 57% of GDP.

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