IMF says Tunisia not at risk of becoming “new Greece”

By bne IntelliNews June 18, 2013

The domestic turmoil related to the current political transition and external risks linked to the global economy weigh on Tunisia’s outlook by the country will not be a "new Greece", the IMF said in a report. The latter followed the recent approval of a USD 1.74bn 24-month Stand-By Arrangement with Tunisia. The aid package aims to support the country’s economic reform programme during 2013-2015, seeking to strengthen fiscal and external buffers and foster higher inclusive growth.

The Tunisian government has committed to an economic reform programme and hopes to achieve a 4.0% GDP growth in 2013, up from 3.6% a year earlier, the IMF said. But the reform programme carries "substantial risks," the IMF warned. The risks are reportedly linked to a deterioration of the international economic environment, a worsening of the security situation, setbacks in the political transition, or delays in external financing.

 "The growth outlook could fall short of projections, particularly if the external economic environment deteriorates further, impacting tourism and remittance inflows," the fund said. The painful political transition and related constraints such as delays in organising the elections “could reduce political commitment to economic reforms, and increase investors' wait-and-see attitude," the IMF noted. Tunisia’s tourism sector, which accounts for 7% of the country’s GDP remains in a "precarious" financial position, the IMF said.

Comparing Tunisia to Greece, the IMF mission chief in Tunisia, Amin Mati, said that "Tunisia is in a much more manageable situation." The country’s 2013 public debt, forecast at 45.3% of GDP, will remain "sustainable" compared with Greece's 170% of GDP projection, he said. 

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