Tunisia: inroads to recovery but economy still shaky

Investors sceptical

13 November, 13:42

Tunisian president Moncef Marzouki Tunisian president Moncef Marzouki

(ANSAmed) - TUNISIA, 13 NOV - The Tunisian economy is making strong inroads to recovery following the fall of the Ben Ali regime, but figures remain worrying. According to a Focus Economia report on Tunisia by Italian bank Intesa SanPaolo, first quarter GDP in 2012 rose 4% versus a 2.4% dip in the same period in 2011. ßCurrent year growth is expected to reach 2.8% while forecasts for 2013 predict a 3.5% rise. Intesa Sanpaolo has also focused its attention on central institute politics, which sold nearly two billion dollars in currency in support of the dinar in 2011 and 2012. Consequently, this limited the depreciation of the nominal exchange rate. For the International Monetary Fund (IMF) it resulted in an overestimation of around 5% of its equilibrium value.

According to the experts a public deficit target for 2012 of 6.6% of GDP will be tricky to achieve, despite some measures - such as fuel price hikes, aimed at bearing the costs. The budget predicts a 6% deficit in 2013. Significantly, a ten year trend (2000-2010) which saw public debt fall from 55 to 40% of GDP was interrupted in 2011.

In the first half of 2012 a payment deficit forced the country to draw on reserves totaling 400 million dollars. And the outlook for the second half of 2012 appears to confirm this trend.

ßIn late September currency reserves amounted to approximately $6.3 billion.

Tunisia's sovereign debt rating was downgraded from BBB to BB by S&P last May in light of a rocky global economic climate and political difficulties in adopting measures to improve it.

A rise in inflation rates has had a knock on effect for food and fuel prices. At the beginning of 2011 rates stood at 3%, 5% at the end, and 5.7% at the end of September. But consumer groups dispute these figures as undervalued in relation to reality. (ANSAMed)


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