Tunisia will not need new credits and BCT will not raise its key rate

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Governor of the Central Bank of Tunisia Marouene El Abassi said at a press conference on Wednesday, July 17, 2019 Tunisia will not need additional funds to ensure the balance of the state budget and will strictly meet its commitments with the International Monetary Fund.

It is the governor of the Central Bank, Marouene El Abassi who formally affirmed it on the basis of the IMF report on the economic reforms in Tunisia, which, he said, “was positive. He later announced that an IMF delegation will visit Tunis next September to assess the economic situation and prepare the new report.

Among the good news give at a press conference on Wednesday, the CenBank Governor said the foreign exchange reserves have reached 91 days of import, and that the year 2019 has been assured in terms of financing thanks in particular to the commitments of the IMF, the World Bank, the European Central Bank and the African Development Bank.

Controlled inflation

The governor of the BCT assured that the current inflation rate is under control, and that the situation does not require a possible increase in the key rate. That situation has been reached due, according to him, to the increase of the tourist receipts (+ 20% in currencies at the end of June), the rise in the remittances by Tunisians abroad and the control of the commercial deficit.

IMF Head of Mission in Tunisia Bjorn Rother said Tunisia’s additional credit of 700 million dinars to feed the 2019 budget is the result of promising signs in the latest IMF report such as the inflation rate and budget deficit as well as the improvement of the pace of exports.

“The first half has been very positive, the economic fragility is starting to disappear, we must continue in this momentum to reduce the rate of inflation, curb the growth of debt and ensure a balanced budget,” he insisted. .

He said that one should be wary of some factors that threaten the Tunisian economy currently such as the increase in the price of oil and the low growth of Tunisia’s main economic partners.

“It is imperative to reduce the public debt that reached 77% of GDP in 2018, and this requires mainly additional efforts in the fiscal area, the moderation of the wage bill, and the reduction of subsidies, especially the subsidy of fuels”, said Bjorn Rother.

He said he was satisfied with the progress made by Tunisia in particular with regard to macroeconomic balances.

Nevertheless, he warned of the risks facing its economy, whose pace of growth is slowing down, calling on the private sector to play its full role, to support the country’s economic recovery.

That said, the IMF approves the “Social Amen” law that was passed last March and aims to promote poor and low-income groups.

It is a text that provides fair criteria for benefiting from social assistance programs to ensure greater social stability.

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