Tu­nisia growth slows sharply in Q2 af­ter mil­i­tant at­tacks

The Pak Banker - - BUSINESS -

TU­NIS: Tu­nisia's eco­nomic growth slowed sharply in the sec­ond quar­ter to 0.7 per cent year-on-year, of­fi­cial data showed, af­ter two Is­lamist mil­i­tant at­tacks on a mu­seum and a beach ho­tel crip­pled its tourism in­dus­try. The econ­omy had ex­panded 1.7 per cent in the pre­vi­ous quar­ter com­pared to the same pe­riod a year ear­lier.

Tu­nisia's tourism in­dus­try, which makes up about 7 per cent of the econ­omy, slowed in June af­ter a gun­man killed 38 mostly Bri­tish tourists in the sea­side city of Sousse. In March, two gun­men killed 21 for­eign tourists and a po­lice­man at Tu­nis's Bardo Mu­seum. Both at­tacks were claimed by Daesh and prompted sev­eral coun­tries to ban travel to Tu­nisia. Strikes and protests have also dis­rupted the coun­try's vi­tal phos­phate ex­ports. Tu­nisia has al­ready cut its GDP growth forecast to 0.5 per cent this year, down from an ini­tially ex­pected 3 per cent. In 2014, Tu­nisia posted GDP growth of 2.3 per cent.

Tu­nisia turned its at­ten­tion to re­viv­ing its econ­omy af­ter it com­pleted a tran­si­tion from the dic­ta­tor­ship of Zine Al Abidine Bin Ali, who was ousted in a 2011 upris­ing, to a democ­racy with free elec­tions and a new con­sti­tu­tion. The gov­ern­ment ex­pects the bud­get deficit to nar­row to 5 per cent of gross do­mes­tic prod­uct in 2015 from 5.8 per cent last year. But Tu­nisia is also un­der pres­sure from in­ter­na­tional lenders to re­duce public spend­ing, in­clud­ing sub­si­dies on ba­sic foods and fuel, and to cut the deficit fur­ther to help eco­nomic growth even as so­cial ten­sions make cost-cut­ting sen­si­tive.

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