Tunisia may have to wait a little longer for a much-anticipated IMF loan instalment, as the Washington-based lender said the North African nation needs more time “to fully flesh out” its economic policy.
The statement, released by the International Monetary Fund at the end of a staff visit to Tunisia, underscores how the nation’s ongoing political bickering is taking its toll on the implementation of broader economic measures, such as curbing inflation, taming unemployment and cutting spending.
“Tunisian authorities are moving decisively on a policy agenda to stabiliSe and reform the economy, taking into account the strained socio-political situation in the run-up” to presidential and legislative elections later this year, Bjorn Rother, who headed the IMF mission, said in a statement. The fund and Tunisian officials “reached mutual understandings on most issues and agree that the authorities need some more time to fully flesh out their policy proposals in a few areas.”
Talks would continue in Washington, Rother said. Tunisia’s finance minister was earlier was quoted as saying the discussions with the fund were progressing in line with earlier talks and that he hoped for an “on time” disbursal of the $250mn instalment of the $2.9bn loan they secured from the IMF in 2016. “The visit of the IMF delegation to Tunisia was positive, and we expect the sixth instalment to be paid” after the fund’s board meets in May, Lotfi Ben Sassi, the prime minister’s economic adviser, said by phone, without elaborating.
The nation that launched the Arab Spring uprisings of 2011 has made significant gains in cementing democracy after years of autocratic rule. While it has avoided the chaos that gripped regional neighbours like Egypt and Libya, militant attacks targeting the tourism sector, frequent strikes and political bickering have stunted efforts to boost growth and stabiliSe the economy.
Annual inflation has stubbornly remained above 7% for the past few months, while the central bank resisted toying with rates even as the IMF said adjustments should be made to counter an acceleration in consumer prices that hit a 25-year high. The IMF, in its latest World Economic Outlook, projected annual inflation of 6.8% in 2019 and 5.2% in 2020.
While growth is expected to increase to 2.7% in 2019 from 2.6% last year, the pace of the gains “has remained insufficient to make a dent in unemployment, which remains especially high for youth and women,” Rother said. “The authorities have continued with policy and reform implementation; however, elevated macroeconomic vulnerabilities still threaten economic stability.”
British tourists takes a selfie after arriving to Tunisia at the Enfidha Airport in Enfidha, Tunisia (file). The IMF, in its latest World Economic Outlook, projected the country’s annual inflation of 6.8% in 2019 and 5.2% in 2020.
