Tunisia’s Banking Sector Shows Resilience in 2025
Fitch, a renowned global credit rating firm, recently announced that Tunisia’s banking sector is well-equipped to support the government’s financial needs in 2025. This positive outlook is primarily attributed to the strong inflow of customer deposits and the minimal private sector lending activities in the country. As a result, Tunisia’s domestic debt, excluding loans from the Central Bank of Tunisia (CBT), is projected to increase this year following a 9% year-on-year growth in 2024.
In its latest evaluation, Fitch revealed that total bank deposits experienced a 6% year-on-year increase in August 2024, while credit to the private sector saw a marginal growth of 1.5% during the same period. Despite these modest figures, the rating agency foresees a notable reduction in fiscal deficits for Tunisia in 2025, with expectations for it to decrease to 5.7% from the 6.8% reported in 2024. This decline is set to lower the country’s overall financing requirements.
The anticipated decrease in fiscal deficits is based on the assumption that Tunisia will benefit from reduced oil subsidies, with Brent oil prices expected to drop by 10 U.S dollars per barrel year-on-year. This cost-saving measure is projected to trim down government expenditure, while revenue is expected to increase from higher tax collections.
According to Fitch’s report, Tunisia’s fiscal deficit is forecasted to decline to 5.7% of GDP in 2025, driven by the expected decrease in oil subsidy costs and an uptick in tax revenue. The agency also predicts a further improvement in the country’s fiscal deficit to 5.5% of GDP in 2026, partly attributed to falling oil prices.
On the external funding front, Fitch anticipates Tunisia securing TND 4.8 billion (or $1.5 billion) from foreign creditors in 2025, equivalent to 2.8% of the country’s GDP. This amount is slightly higher than the 2.5% recorded in 2024 but significantly lower than the 5.5% average observed between 2018-2022.
The positive outlook for Tunisia’s fiscal stability comes after Fitch upgraded the country’s sovereign credit rating from CCC- to CCC+ in September 2024, signaling increased confidence in Tunisia’s ability to meet its substantial fiscal financing needs. This upgrade was attributed to Tunisia’s strengthened external position, supported by ample foreign currency reserves that enable the country to fulfill its debt obligations.
With international reserves amounting to $8 billion at the end of 2024, Tunisia is well-positioned to meet upcoming debt maturities, including a $1 billion Eurobond. The nation’s improved credit rating and robust financial indicators paint a promising picture for its economic prospects in the coming years.
