IMF to provide $247 million for Tunisia’s reform

IMF to provide $247 million for Tunisia’s reform

PRESS RELEASE_ To pursue its economic reform, Tunisia is set to benefit from a sixth disbursement of around $247 million from the International Monetary Fund (IMF).

The country is expected to secure the funding following the Executive Board’s review that is expected to take place by early June 2019, according to IMF statement issued after the IMF team and the Tunisian authorities met in Washington on Wednesday. The statement indicated that the expected funding to Tunisia will bring total disbursements under the EFF to about US$1.6 billion and will help unlock additional financing from Tunisia’s other external partners.

The IMF team and Tunisian authorities have discussed the Tunisia’s economic reform program and their policy plans for the Fifth Review of the Extended Fund Facility (EFF) arrangement.

At the end of these discussions, Mr. Rother made the following statement: “We had fruitful discussions with the authorities on their economic policy agenda aimed at stabilizing and reforming the economy in the months ahead, taking into account the difficult socio-economic situation and the challenging regional environment. The authorities and staff agreed on policy and reform measures to ensure that the budget deficit target of 3.9 percent of GDP (before grants) for 2019 can be met to contain the high debt and elevated financing needs.”

“In parallel, the authorities are working on strengthening the social safety net for lower-income families to help protect them from the potential impact of the reforms, supported by the new databank of vulnerable households. Monetary and exchange rate policies will remain geared towards reducing inflation that threatens the standards of living of all Tunisians and on supporting an improvement in the large current account deficit through better price competitiveness,” Mr. Rother said.

African Development Bank report states that real GDP growth of Tunisia rose to an estimated 2.6% in 2018 from 1.9% in 2017, spurred by agriculture (8.7% growth) and market services (3.2%). This trend is projected to continue in 2019 and 2020. On the demand side, investment (5% growth) and exports (2.7%) are projected to be the primary drivers of growth.