São Paulo – Tunisia should see a 2.5% increase in Gross Domestic Product (GDP) this year, as per an estimate from the International Monetary Fund (IMF), which had a recent mission to the Arab country led by economist Björn Rother. Despite the growth that’s expected, the Fund warns that big macroeconomic challenges lie ahead for the country.
Both the IMF and Tunisia agree that urgent action is needed with regard to budget policy and long-term reforms. Still, the former lauded complimented the Tunisian government on its achievements in public sector modernization.
“The Tunisian economy has remained resilient in a difficult domestic and international environment,” said Rother, adding that the growth expectation is supported by improved confidence “following the successful Tunisia 2020 conference in November and the adoption of crucial private-sector legislation.”
The conference was held in Tunis, and it introduced the country’s 2016-2020 Development Plan to the international community, including financing needs, ongoing government reforms, and a breakdown of existing business opportunities for investors in each part of Tunisia.
The challenges facing Tunisia include a widening public debt, which reached 60% of GDO last year, a public wage bill among the world’s highest, and a high external current account deficit.
“The IMF team and the government agree that urgent action is necessary to protect the health of public finances, increase public investment, and accelerate progress with delayed structural reforms,” an IMF press release quoted Rother as saying.
The government’s short-term priorities include mobilizing more tax revenue in a fair and efficient way, rationalizing the public sector wage bill to create more space for public investment, and implementing the fuel-price adjustment mechanism, as well as putting the social security system on a sustainable basis. These efforts should bring about stronger economic growth, more jobs, and ensure access to adequate basic services for the population.
*Translated by Gabriel Pomerancblum
