The Executive Board of the Central Bank of Tunisia (BCT) held its periodic remote meeting on Wednesday, March 31, 2021 and analyzed and discussed the main economic, monetary and financial indicators, in the wake of the current circumstances underwent by Tunisia, especially following the pandemic of COVID-19 and its disastrous impact on economic activity and global balances, besides a social and political climate that seemingly does not help overcome this crisis.
The Board said this difficult situation has induced an unprecedented decline in the performance of economic activity, recording a negative growth rate of around -8.8% in 2020.
On the other hand, the Board noted the stability of inflation in February 2021 at 4.9% year-on-year, for the fourth consecutive month, compared to 5.8% in the same month of the past year. This development was due to the slowdown in the rate of increase in prices of services (5.0% compared to 5.3%) and food (4.8% compared to 4.9%), while prices of manufactured goods showed a slight increase (4.8% compared to 4.6%).
The inflation rate in February 2021 was 4.9% year-on-year, compared to 5.8% in the same month last year.
As for the main indicators of core inflation, “inflation of non-administered and fresh products” saw a slight increase in its growth rate to 5.1% at the end of February 2021 compared to 5.0% in the previous month.
As regards recent developments in the external sector, the Board pointed to the regression of the current account deficit during the first two months of the year 2021 to 847 MD or 0.7% of GDP, against -1078 MD and 1% during the same period of the year 2020 and this, in connection with the contraction of the trade balance deficit of 21.2%, following the persistence of the fallout of the crisis of COVID-19 and the consolidation of labor income (+11.2%) that have partially covered the decline in tourism revenue by 55.9%.
Given these developments, net foreign exchange assets reached 21,732 MD or 156 days of imports as of March 29, 2021 against 20,098 MD or 115 days of imports at the same date of the previous year.
After discussions and deliberations on the above points, the Board stressed the need to undertake the necessary reforms and achieve political and social stability without delay, so as to improve the visibility of economic agents.
The Board affirmed that the Central Bank, for its part, will continue to closely monitor developments on the international and national levels and take the appropriate decisions and measures to preserve monetary and financial stability, fully support the national economy and effectively contribute to restoring the country’s main global and financial balances.
At the end of its work, the Board decided to maintain the key interest rate of the Central Bank of Tunisia unchanged at 6.25%.