Tu­nisian econ­omy fac­ing chal­lenges, says IMF

The Pak Banker - - COMPANIES/BOSS -

In re­sponse to a re­quest from the Tu­nisian au­thor­i­ties, an IMF mis­sion led by Mr. Amine Mati vis­ited Tu­nis from Fe­bru­ary 18 to March 3, 2016, to hold dis­cus­sions on a four-year ar­range­ment un­der the IMF's Ex­tended Fund Fa­cil­ity (EFF), ex­pected to amount to about $2.8 bil­lion, to sup­port the coun­try's eco­nomic re­form pro­gram. At the end of the visit, Mr. Mati said, "The team held pro­duc­tive dis­cus­sions with se­nior govern­ment and Cen­tral Bank of­fi­cials. It also met with mem­bers of par­lia­ment, rep­re­sen­ta­tives of the bank­ing and pri­vate sec­tors, political par­ties, trade unions, donors, and civil so­ci­ety. Dis­cus­sions fo­cused on the govern­ment's eco­nomic re­form agenda, pol­icy pri­or­i­ties to boost eco­nomic growth, and the role that the IMF can play to sup­port Tu­nisia's eco­nomic re­cov­ery".

Mov­ing ahead with eco­nomic re­form is cru­cial as the Tu­nisian econ­omy con­fronts sev­eral sig­nif­i­cant chal­lenges. Eco­nomic growth is held back by in­vestors' wait-and-see at­ti­tude and re­gional un­cer­tain­ties, un­em­ploy­ment is high, and the cur­rent ac­count deficit re­mains sig­nif­i­cant. Pro­mot­ing pri­vate-sec­tor de­vel­op­ment and mod­ern­iz­ing the pub­lic sec­tor are im­por­tant tasks. Ad­di­tional fi­nanc­ing will be needed to re­build buf­fers, while at the same time cor­rect­ing struc­tural in­ef­fi­cien­cies that lower Tu­nisia's abil­ity to cre­ate jobs and fu­ture growth po­ten­tial.

The team sup­ports the govern­ment's com­pre­hen­sive eco­nomic re­form pro­gram, spelled out in its eco­nomic vi­sion, which is ex­pected to be de­tailed in its forth­com­ing 5-Year De­vel­op­ment Plan. The govern­ment pro­gram ap­pro­pri­ately fo­cuses on boost­ing eco­nomic growth, cre­at­ing more jobs, and rais­ing the liv­ing stan­dards of all Tu­nisians. Over­all, the pro­gram will help make growth more in­clu­sive and re­duce re­gional dis­par­i­ties. To achieve th­ese ob­jec­tives, the govern­ment has com­mit­ted to con­tinue pur­su­ing pru­dent macroe­co­nomic poli­cies and ac­cel­er­ate the im­ple­men­ta­tion of its am­bi­tious struc­tural re­form agenda. The mis­sion dis­cussed its ob­ser­va­tions on the eco­nomic re­form pro­gram with the Tu­nisian au­thor­i­ties. Ne­go­ti­a­tions for a new IMF ar­range­ment to sup­port the govern­ment's eco­nomic re­form pro­gram are at an ad­vanced stage. As next steps, the team will con­tinue its dis­cus­sions with the au­thor­i­ties as they fi­nal­ize their re­form pri­or­i­ties and fine tune plans for this year's bud­get ex­e­cu­tion and fi­nanc­ing needs. In the com­ing weeks, the team plans to fi­nal­ize the de­tails of the EFF in sup­port of Tu­nisia's eco­nomic pro­gram.

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