The International Monetary Fund said on Tuesday it had extended by seven months a standby loan for Tunisia to allow more time for the country to put banking and fiscal reforms in place.
“The extension will provide time for the Tunisian authorities to implement the policy measures needed to deliver on forward-looking commitments – notably on the banking and fiscal reforms – which will help reduce vulnerabilities and spur higher and more inclusive growth,” the Fund said in a statement.
The IMF approved a $1.75 billion stand-by arrangement in June 2013, of which about $1.15 billion has been disbursed. The seven-month extension keeps the loan in place until the end of this year.
Under the program, Tunisia agreed to follow certain economic polices, such as keeping its deficit under control.
An IMF mission will visit Tunisia this month to review the nation’s efforts to meet its policy commitments and to conduct an annual review of the economy.
Tunisia’s budget deficit is expected to narrow to 5 percent of Gross Domestic Product this year from 5.8 percent in 2014, but that target has been made tougher by salary hikes for tens of thousands of public school teachers who went on strike last month and boycotted student exams to press wage demands.