Tunisia- Tunisia has announced its determination to turn to European financial markets, namely in Germany, to receive EUR1 billion (approximately TND1.437 billion) to support more resources in the state’s treasury.

Representatives of Tunisia’s government began holding meetings with a number of European investment funds on Feb. 5 in an effort to determine the value of these assets and the percentage of interest, as well as the repayment period.

In 2016, the deficit at the level of gross domestic product (GDP) reached around 6.4% — this makes it necessary to turn to international financial markets to get loans that can fill the gap in the state’s limited resources and relapse of the tourism sector from one side, and rising state expenses on the other side.

Tunisian authorities have concerns that Fitch downgrading Tunisia rating might have an impact. Economists and financial experts believe the interest on debts might increase around 8% given the ongoing threats in Tunisia – this is a high rate that might worsen the economic crisis and make the process of entering the financial markets costly.

Fitch estimated a 1.2% economic growth in Tunisia in 2016 compared to initial expectations of around 2.2%. This rate is relatively low considering to what other countries of the same rating achieve.

Fitch stressed that Tunisia needs to borrow during 2017 up to 7% of its GDP from foreign markets to pay its due debts and cover its budget needs. Yet, it also addressed some positive factors that contribute to maintaining stability in the Tunisian economy – these factors are: the progress in banking and economic reforms and abiding by recommendations of the International Monetary Fund (IMF).