The Tunisian economy got out in 2012 of the recession it had experienced a year earlier and begins a gradual economic recovery that has affected most sectors, including agriculture and services, especially tourism and air transport with an in crease in tourism revenue and number of passengers by 30% and 32%, respectively, and non-manufacturing sector with the mining production indicator growing by 11 2% at the end of October 2012, and to a lesser extent energy.
This is the picture painted by the Board of Directors of the Central Bank of Tunisia, at its monthly meeting on Wednesday, January 30.
In contrast, export-oriented manufacturing industries posted a decrease of 1.1% in this indicator for mechanical and electrical industries and 3.6% for textiles and clothing.
At the level of financial balances, the Board noted that a set of negative trends recorded during the last year attributable to both the unfavorable international conditions and the domestic business climate have exacerbated pressures on the balance of the current account, the increase in the general level of prices and the worsening of state budget deficit.
On external payments, exports have been hit by the effect of the decline in external demand from European partners which had experienced a recession last year, while imports have increased, especially for energy, capital goods equipment and consumer goods at a faster pace. These developments have led to a widening of the trade deficit by 35% in 2012, contributing to the increase in the deficit of the balance of the current account, which reached 8.1% of GDP against 7.3% a year earlier. The financing of this deficit was achieved through increased flows of foreign direct investment (85.4%), on the one hand, and increased mobilization of external funds in the medium and long term, on the other hand, which helped consolidate net assets in foreign currencies to reach 12,576 MTD or the equivalent of 119 days of imports at the end of the year 2012 against 10,582 MTD and 113 days at the end of 2011.
With regard to the trend of prices, inflation reached 5.9% yoy and 5.6% on average at the end of 2012 against 3.5% in 2011. This increase affected all product groups, especially food products whose prices have increased by 8.4% at the end of the previous year.
On the monetary side, banks’ needs in liquidity gradually diminished during the last quarter of the year, which led to a decline in central bank’s intervention in the money market. This resulted, along with the decision of the Central Bank to raise its key interest rate at the end of August 2012, in an increase of the average interest rate on the money market from 3.16% in January 2012 to 3.98 % in December of the same year.
At the beginning of the year, the intervention of the Central Bank in the money market was reduced to 3,663 in January MTD (against 4,786 MTD in the previous month), in connection with the rationalization of refinancing on the one hand, and improvement of bank liquidity mainly due to the significant increase in state spending, on the other hand. Moreover, the average interest rate on that market rose to 4.25% during the same month.
Concerning the activity of the banking sector, it was marked by the rise of the outstanding deposits in 2012 at a rate faster than the previous year (10.8% against 5.1%) involving, in particular, certificates of deposits and demand deposits. However, the contributions of the economy experienced a slowdown in their growth rate (8.7% against 13.4% in 2011), especially for medium-term loans in connection with the slowdown in private investment.
In light of these developments, and while noting signs of recovery in economic activity at an encouraging pace in some areas, on the one hand, and the persistent pressure on the internal and external financial balances, on the other hand, the Board stresses the need to combat its sources and recommends more vigilance and implementing necessary measures to maintain these balances at sustainable levels, conditions for the revival of investment, growth and employment, and the restoration of economic and financial stability. It decided to keep unchanged the key interest rate of the Central Bank.
