São Paulo – The International Monetary Fund (IMF) reported this Tuesday (19th) that its executive board decided to extend its stand-by arrangement with Tunisia for seven months, until December 31st. The original two-year deal was signed in 2013 and provided for the disbursement of US$ 1.75 billion on the Fund’s part.<\/p>\n
An IMF press release said the extension is meant to give the Tunisian government more time to implement the measures it had agreed on with the Fund, notably banking and fiscal reforms. The Fund believes said actions will make the country less vulnerable and spur higher, more inclusive growth. <\/p>\n
So far, US$ 1.15 billion have been disbursed under the arrangement. An IMF mission will travel to the country this month to weigh out its macroeconomic conditions. <\/p>\n
Tunisia needs money to address its budget deficit, but tourism, one of its primary economic activities, took a hit as potential visitors fear for their safety and the Eurozone – the leading issuer of tourists to Tunisia shows lackluster performance. Additionally, unemployment rates are running high in the country.<\/p>\n
Last week, the European Bank for Reconstruction and Development (Ebrd) slashed its Gross Domestic Product (GDP) growth forecast for Tunisia this year by 0.2% to 2.8%; in 2016, the bank expects Tunisia to grow by 3.6%. The downward revision stemmed precisely from the delay in rolling out economic and financial reforms, among other issues. <\/p>\n
Nonetheless, Tunisia has an edge: out of the countries most strongly affected by the Arab Spring in 2011, it is the only one that has remained on track in its transition to democracy, and this, coupled with cheap oil, should underpin its rebound, the Ebrd says. <\/p>\n
*Translated by Gabriel Pomerancblum<\/strong><\/p>\n