The Executive Board of the Central Bank of Tunisia (BCT), on Monday, pointed to the slow pace of economic growth whose rate should not exceed 1.4% for the whole of 2019, mainly related to the poor performance of the export-oriented and extractive sectors.
With regard to price developments, the Board noted in the statement issued at the end of its periodic meeting, the stabilization of the inflation rate at around 6.7% year-on-year during the month of September 2019, after prices of food products and services eased back.
Core inflation (excluding food and fresh products) also continued to drop in the same month to 6.9% vs. 7% in August 2019.
Concerning the external sector, the Board pointed to the continuing decline in the current account deficit during the first nine months of the current year, i.e. 6.4% of GDP compared with 8% for the same period of the previous year.
This is due to the slowing pace of the widening trade deficit, as well as the significant increase in tourist receipts and remittances from Tunisian expatriates.
For their part, net foreign exchange reserves have considerably risen, reaching 18.506 MD or 104 days of imports as of October 25, 2019 against 13.974 MD or 84 days at the end of the year 2018.
Moreover, the exchange rate of the dinar continued its improvement against the euro and the dollar, in relation to the excess of liquidity on the foreign exchange market.
The Board also underlined that the monetary and exchange rate policies recently adopted by the Central Bank have contributed to the achievement of the objectives set, thanks to the improvement of the main monetary and financial indicators, particularly at the level of inflation, current account deficit and refinancing volume.
In this regard, it stressed the need to combine efforts to accelerate the pace of growth, by putting in place adequate economic policies to achieve healthy growth and restore the overall balance of the economy.
Moreover, the Board decided to keep the central bank’s key interest rate unchanged.
