Tunisia Gets $2.9 billion IMF Loan to Strengthen Job Creation and Economic Growth

  • Tunisia faces weak economic activity, low employment, high external imbalances
  • IMF loan to support the government’s economic vision of more inclusive growth
  • Program includes reforms to tackle high unemployment, strengthen governance
  • The program builds on the previous arrangement, which supported Tunisia in the immediate aftermath of the Arab Spring.

    Speaking to IMF Survey, IMF Mission Chief for Tunisia Amine Mati explains how the country’s economic program aims to tackle remaining challenges and support the authorities’ new economic reform plan.

    IMF Survey: What has Tunisia achieved under the first program, and why does the country need additional assistance from the IMF?

    Mati: The first program, the Stand-By Arrangement, helped Tunisia preserve macroeconomic stability during a very difficult time—prolonged political transition, increased social tensions including strikes and work stoppages, and security tensions arising from conflicts with Salafists and the tragic terror attacks of 2015 that devastated the tourism industry. Amid this challenging landscape, the authorities were able to implement an ambitious reform agenda aimed at supporting private sector development, tackling high unemployment, and reducing regional disparities.

    Despite significant progress, Tunisia is still facing many economic challenges—spending composition has worsened, external imbalances are high, the dinar remains overvalued, banking fragilities remain, and reforms to strengthen the business climate have been slow. That is why the authorities requested a follow-on four-year program, the Extended Fund Facility, to support their economic vision of modernizing the country’s development model and reducing existing vulnerabilities.

    This longer-term program is designed to target the critical long-standing structural weaknesses of Tunisia's economy—the ones that have resulted in slow growth and high external balances. Therefore, the main focus of this program is to consolidate the progress that has already been made on macroeconomic stability and to address remaining structural obstacles to more inclusive growth and job creation.

    IMF Survey: Can you describe how the IMF’s new program for Tunisia plans to support the authorities’ five-year economic vision?

    Mati: The authorities’ vision rests on five-pillars, of which the main driver is private sector development. To contribute to the authorities’ economic reform agenda, the new program with the IMF focuses...

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