IMF Executive Directors noted that Tunisia weathered the global crisis well, largely reflecting its sound macroeconomic management and structural reforms over the last decade
, and timely policy responses since the onset of the crisis.
Global Arab Network has received IMF report on Tunisia, which states that Tunisia entered the global crisis with strong fundamentals, thanks to sound policies and reforms implemented over the years.
Tunisian authorities’ timely and adequate policy response contributed to mitigating the impact of lower external demand in 2009. Moreover, the financial sector was not affected by the global financial crisis, as banks continued to rely on steady domestic resources. As a result, real gross domestic product (GDP) growth exceeded 3 percent in 2009. With solid exports of services and remittances as well as lower imports, the current account deficit declined and external reserves increased to the equivalent of 6 months of imports of goods and services by end-2009. Inflation remained moderate at 3.7 percent on average.
Economic growth has gathered momentum since mid-2009, on the back of the recovery in exports and solid domestic demand. At the same time, with even stronger import growth, the current account deficit widened significantly and external reserves declined during the first part of 2010, while remaining at a comfortable level. For the year as a whole, as the recovery in Tunisia’s main partners is expected to be modest, Tunisia’s real GDP growth is projected to reach 3.8 percent, supported by a rebound in industrial activity and investment, while agricultural performance will likely be weaker than last year. Inflation edged up slightly to5 percent (year-on-year) in May 2010, due to rising food prices, but non-food price increases have remained very moderate at around 3 percent.
Risks to the outlook are related to the significant downside risks to growth in Tunisia’s European partners, entailing a possible escalation of financial stress and contagion and a more severe impact than currently expected of the planned fiscal consolidation on still-weak domestic demand. The strength of the recovery in Europe will determine to a large extent the pace of Tunisian exports growth, tourism receipts and remittances. On the other hand, the recent depreciation of the euro could boost exports of the euro area, and could benefit Tunisian exports in sectors such as electrical and mechanical industries. The medium-term outlook is subject to similar risks, with Tunisia’s traditional partners expected to be a less buoyant source of external demand than prior to the crisis.
Global Arab Network