The International Monetary Fund (IMF) said Friday it has approved an aid package of $ 1.7 billion for Tunisia to support the transition initiated in January 2011.
The Board of Directors of the IMF, which represents 188 member states greenlighted this two-year financial assistance program. As a result of the Board’s decision, an amount equivalent to US$150.2 million is available for immediate disbursement, and the remaining amount will be phased in over the duration of the program, subject to eight program reviews.
The Stand-By Arrangement entails regular access to IMF resources, amounting to 400 percent of Tunisia’s quota, said the Fund in a statement.
“Tunisia has embarked on a moderate economic recovery while facing a challenging international economic environment and pursuing a political transition. A fragile banking sector, pressing social demands, widespread regional disparities, and high unemployment are key challenges, together with widening external and fiscal deficits, Ms. Nemat Shafik, Deputy Managing Director, and Acting Chair, said.
Undermined by political instability, social recurrent and investment mast conflict Tunisian growth remained insufficient to truly begin the rampant unemployment in the country (17% of the active population about).
Tunisia faced economic difficulties and a series of external shocks following the January 2011 revolution. Due to a challenging international economic environment, as well as regional and domestic tensions, real GDP contracted by 2 percent in 2011, foreign direct investment (FDI) and tourism declined by more than 30 percent year-on-year, and unemployment rose to record levels. However, after the sharp economic decline, the Tunisian economy began a moderate recovery in 2012. The gross domestic product (GDP) should accelerate its recovery initiated in 2012 with an expected growth of 4.0% this year, according to projections of the Fund.
In mid-May, the country was the scene of violent clashes in Tunis after the cancellation of a Salafist Congress by the government led by Islamist party Ennahda.
After these new tensions, Moody’s ratings agency lowered by one notch the debt rating of the Tunisian government to Ba2 with a negative outlook, citing “continuing political uncertainty.”
Since the outbreak of the Arab Spring, the IMF has stepped up its activities in the Middle East by providing assistance to Morocco and Jordan and by providing technical assistance to Libya.
Negotiations on an aid programme for Egypt are also underway for several months but they come up against political instability in Cairo.