São Paulo – Tunisia needs to reduce its current account and budget deficits. According to a mission from the International Monetary Fund (IMF), which paid a visit to the North African country from novembro 12th to 27th, Tunisia also needs to implement structural reforms at a faster rate and promote economic growth.
In a press statement released last Monday evening (2nd), the head of the IMF mission to Tunisia, Amine Mati, said the lengthy political transition process and security “incidents” are having a negatively effect on the Tunisian economy, causing slow growth, delayed reforms and mistrust from foreign investors
“To address the main challenges facing Tunisia, immediate and urgent efforts are required to control budget and external deficits, reduce banking sector vulnerabilities, and generate more rapid and inclusive growth that can absorb unemployment while reducing social and economic disparities,” according to the Fund’s statement.
According to the IMF, Tunisia’s budget deficit is expected to rise to 8.8% of the Gross Domestic Product (GDP) in 2013, due to expenditures corresponding to the 2012 budget that will be paid for this year, increased energy subsidies and longer-than-expected delays in payments. According to the press release, the current account deficit “continues to rise” due to weak external demand for Tunisian products and low tourism revenues.
“It is essential to speed up the implementation of the government’s reform program in order to generate more rapid and inclusive growth, including through the reform of the banking sector, the introduction of new procurement procedures, the new investment code, and a household support program for the most vulnerable,” according to the press release. The IMF forecasts that the Tunisian GDP should be up 2.7% and inflation should be 5.5% by the end of 2013.
*Translated by Gabriel Pomerancblum