35.9 C
Tuesday 21 September 2021
HomeFeatured NewsTunisia to issue $350 million US-backed loan in July

Tunisia to issue $350 million US-backed loan in July

Tunisia plans to issue $300 million to $350 million in loan guaranteed by the U.S. government in July, a Finance Ministry official said on Wednesday, as it taps international debt markets for the first time in five years.

“The maturity is highly likely to be seven years. We have not yet decided which banks to mandate but they will be international,” Chaker Soltani, director general at the Finance Ministry, said on the sidelines of an Arab Monetary Fund conference in the UAE capital.

The U.S. guarantees will enable Tunisia to borrow at much lower rates than its risk profile would normally allow. Soltani said he expected rates around 50 to 75 basis points over U.S. Treasuries.

The North African state, the first to rise up against its leader in the “Arab Spring,” expects its 2012 deficit to be 6.6 per cent of GDP and less than 6 per cent next year, he added.

The 2012 deficit forecast is slightly above the 6.5 per cent projected in March as the government increases spending on development and job creation.

To help cover the increased spending, Tunisia plans to 1.4 billion dinars in domestic borrowing this year, Soltani said, and a similar amount again in 2013.

The government may also issue debt, backed by the World Bank, early next year but the timing and amount has yet to be decided, he added.

The Tunisian economy shrank by 1.8 per cent in 2011 and is expected to grow 3.5 per cent this year.


Please enter your comment!
Please enter your name here

- Advertisement -