Strike activity and a decline in tourism arrivals after the terrorist attacks in March and June badly hit the Tunisian economy. As a consequence the current account is expected to be in a deficit of -8.5% of GDP in 2015 and the fiscal budget in a deficit of -5.7% of GDP. Security challenges and social tensions are expected to further cloud the economy in 2016. Moreover, a rift in the dominant political party threatens to destabilise the Tunisian government which might have an impact on badly needed reforms. These events have urged Credendo Group to downgrade the Tunisian short-term political risk classification from category 3/7 to 4/7.