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Tunisia: IMF confident in country’s potential to achieve higher, more inclusive growth

The International Monetary Fund stressed its commitment to commitment to supporting Tunisia during its historic transition, and the importance that it attaches to promoting strong, sustainable and inclusive growth to respond to the aspirations of Tunisia’s society, especially its young people.

This statement was made by Mr. Masood Ahmed, Director of the Middle East and Central Asia Department of the International Monetary Fund (IMF) who visited Tunis on July 1-2, 2013.

“Tunisia’s recovery is continuing at a modest pace, with risks to the near-term outlook heavily dependent on the unfolding of the political transition and developments in Tunisia’s main trade partners. The legacy of widespread social and economic disparities, high unemployment, together with widening external and fiscal deficits and a fragile banking sector, are pressing challenges that need to be addressed, he added.

“The swift implementation of Tunisia’s home-grown reform program aimed at stabilizing the economy in the short term, fostering higher and more inclusive growth, and protecting the most vulnerable, is essential for restoring investors’ confidence, strengthening foreign reserves, and making the economy more resilient to adverse economic developments. Important steps have already been taken to reduce vulnerabilities through tighter monetary policy to contain inflation, greater exchange rate flexibility, and the streamlining of energy subsidies to preserve fiscal sustainability.

“Moving forward with addressing significant vulnerabilities in the banking sector, increasing growth-supporting public investments and implementing comprehensive structural reforms – including the corporate tax reform and a new investment code – will promote private sector- led growth and reduce regional economic and social disparities. Strengthening of social safety nets will be essential to protect the most vulnerable from the impact of reforms.

“Tunisia’s long-term growth potential is substantial. The implementation of the envisaged structural reforms, together with the country’s own strengths – a highly educated labor force and an open economy – will allow Tunisia to unleash this potential and achieve higher and more inclusive growth.

“The IMF remains fully committed to supporting these efforts through financing under the recently approved Stand-By Arrangement, policy advice and technical assistance,” Mr. Masood Ahmed said in conclusion.

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