The closing meeting of the International Monetary Fund (IMF) mission in Tunisia was held on Tuesday in Tunis under chairmanship of Taoufik Baccar, Governor of the Central Bank of Tunisia.
The meeting, which is part of consultations provided for by the IMF regulations, focused on the outcome of the different meetings held by the mission with officials of the concerned departments and structures. It also dealt with the economic indicators of 2009 and progress of growth and domestic and foreign financial balances.
Emphasis was placed on strategies adopted in terms of monetary policies and exchange and reforms planned in the banking, fiscal and financial fields.
The Governor underlined Tunisia’s keenness to preserve the general balances, carry out the required reforms to speed up the pace of growth and accordingly encourage the employment of the largest possible number of university graduates by restructuring the economy to strengthen buoyant and high technological added-value sectors.
Toujas-Bernaté, Head of the Middle East and Central Asian Department at the IMF emphasised the capacity of the Tunisian economy to overcome the crisis, praising the deep economic and financial reforms adopted by the country.
In another development, the World Bank said, in its Report on Global Economic Prospects in Middle East and North Africa, that the more diversified economies of the region, including Egypt, Jordan, Lebanon, Morocco and Tunisia, were directly affected by the recession in key export markets in the European Union, and to a lesser degree, the United States, carrying exports to sizeable decline over the course of 2009. Signs of some recovery are now apparent in the early months of 2010. Industrial production has largely followed the decline in exports. Though these (largely) oil-importing economies enjoyed reprieve on import bills, with a substantial improvement in terms of trade, they are also suffering severe indirect consequences of the financial crisis and recession. These include reduced remittance inflows from Europe and the high-income oil exporters, a cutback in FDI flows from the latter group, and tourist arrivals diminished by the crisis.
Fiscal policy for the diversified economies is expected to continue to be expansionary, as countries use various measures to stimulate demand. But these will carry adverse consequences for fiscal balances—for some economies, including Lebanon, Jordan and Egypt, for which fiscal space is limited—and the fiscal position could become a longer-term growth constraint.
Among the more prominent exporters of the group, Egypt‘s merchandise exports peaked at more-than 100 percent growth (y/y) during summer 2008 (the effects of oil exports coming on stream), before slipping to decline of 30 percent a year hence. In broader fashion, the sharp falloff of import demand in Europe yielded a growth path for the aggregate of diversified exporters—which peaked near 70 percent in summer 2008—fell to nil by year-end before recovery set in. Production in the diversified economies was directly affected by the downturn in exports, as well as by softening domestic demand, in turn adversely affected by several important indirect channels of the crisis.
Industrial production for the group moved from gains of 10 percent in early 2008 (y/y) to trough at nil in spring 2009, though with much diversity across countries.
There are early signs of recovery, which have carried the group‘s merchandise exports to growth of 18 percent by January 2010 (y/y), with advances for Egypt and Morocco bettering these figures at 45 percent and 23 percent respectively during February. Production has not yet responded to the new impetus, as business may be using existing inventories to meet demand, a sign of caution under current global circumstances.