(Tunis) The mission to Tunisia of a team from the International Monetary Fund (IMF), within the framework of negotiations on an aid program for the country in crisis, ended on Monday with “satisfactory progress”, indicated Tuesday the institution, stating that the discussions were continuing.
Posted at 4:25 p.m.
“The Tunisian authorities and IMF staff have made satisfactory progress on the parameters of economic policies and reforms [devant être menées par les] authorities, which will be framed by a program supported by the IMF,” the institution said in a press release.
“Discussions will continue over the coming weeks,” the IMF said.
Tunisia has requested a loan, under the Extended Credit Facility (MEDC), to help it cope with a serious financial crisis that has worsened with the COVID-19 pandemic and the political instability in the country, marked by President Kais Saied’s coup in July 2021.
It has also worsened in recent months with the war in Ukraine, due to Tunisia’s dependence on that country and Russia for its food imports.
The amount of the loan had been estimated at around two billion euros ($2.64 billion) by experts. The IMF makes its granting conditional on the implementation of a reform programme.
The reform plan proposed by the Tunisian government was initially rejected by the powerful trade union federation UGTT.
“Considerable progress is being made by the authorities on their economic objectives and good coordination is emerging between ministries and agencies around a common vision which is healthy. It is now necessary to accelerate the implementation of this program”, affirms in this press release Björn Rother, who led this mission.
He notes that “the Tunisian economy is suffering from the economic consequences of the war in Ukraine” and in particular the surge in agricultural prices, Ukraine and Russia being the main suppliers of wheat to the Maghreb.
“The near-term outlook is challenging,” Rother said, as “growth is likely to contract as higher international energy and food prices add to already very high inflation. and increasing fiscal and external deficits, as well as debt”.
Thus, “urgent measures are required to reduce these imbalances in a socially sustainable way”.
“Given the urgency of the situation, broad buy-in will be essential to reduce macroeconomic imbalances, establish stability and support job-creating growth,” he said.
Furthermore, “the international community will once again have a major role to play in supporting the authorities’ program by rapidly making funds available”.