Tunisia to receive IMF support if it hits budget targets

18 Apr 19

Tunisia is to receive $247m in financial assistance, following successful talks in Washington with the IMF.

The meeting involved the IMF’s Björn Rother and Tunisia’s ministers of finance development, investment and international cooperation.

The allocation, in the form of an Extended Fund Facility, follows the IMF’s fifth review of Tunisia’s economic reform programme. It brings total EFF disbursements to Tunisia to $1.6bn.

The Tunisian economy, which is based on oil, phosphates, food products, car part manufacturing and tourism is being reformed and liberalised after decades of centralised state control. The country’s economy has been growing moderately for the past decade but suffered a setback in 2015 when 38 people, including 30 Britons, were killed by a gunman in the resort of Sousse.

Tunisia has a Human Development Index ranking, relating to life expectancy and education and income levels, of 96th globally and 5th in Africa.

The latest funding is conditional on Tunisia achieving a budget deficit target of 3.9% of GDP for 2019 and minimising its future debt.

Tunisian representatives agreed to work on strengthening the social safety net for lower-income families, supported by the new databank of vulnerable households. They assured the IMF that monetary and exchange rate policies will remain geared towards reducing inflation and supporting an improvement in the current account deficit through better price competitiveness.

Rother said: “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 agreement is subject to approval by a meeting of the IMF’s executive board that is expected to take place by early June. The EEF should help Tunisia to unlock additional financing from other external partners.

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