Moody's keeps Tunisia's investment rating

Moody's Investors Service has kept the investment rating of Tunisia, that is Baa3 with negative outlook reflecting, it says, the country's moderate economic, institutional and financial strength. In 2012, Moody's expects budget deficit to double to stand at 7.5% of GDP, according to a report on the annual assessment of Tunisia's sovereign risk published Friday by Tunisia's Central Bank. The US rating agency estimates that Tunisia's debt/GDP ratio will rise to 48.5% at end of 2012 from 40.8% at end of 2010; This ratio is still in line with the country's Baa3 rating. At the economic level, after the country's economy contracted 2.2% in 2011, Moody's expects Tunisia's 2012 current account deficit to remain stable at 8% of GDP, which is still high compared with the historical average of 3.2% over the 2000-2010 period, as high commodity prices (both oil and food) and growing imports drive the trade deficit higher. Tunisia's rating also takes into account the country's moderate institutional strength.