Tunisia’s gross domestic product (GDP) growth could once again exceed five percent with a rebound in export growth and agriculture for 2003. According to the International Monetary Fund (IMF)’s recently concluded the Article IV consultation with Tunisia, the nation’s exchange rate depreciated by 3.5 percent in real effective terms over the last 12 months.
According to the IMF consultation, the economic outlook for Tunisia for 2003 is favorable. The external current account deficit is forecast to narrow, in part because of continued slack domestic demand, while external reserves are projected to remain close to three months of imports. Recent indicators point to resumption in tourism flows, although tourism poses a key risk to the outlook.
The Tunisian government will keep a tight rein on expenditures in 2003 in an effort to lower the budget deficit by 0.3 percent of GDP, although revenue growth was weak in the first quarter because of slow domestic activity and low import growth, reported the IMF. This consolidation should reduce government debt as a share of GDP to below 60 percent.
Unemployment remains high at 15 percent and economic growth has not been sufficient to meet the authorities' goal of raising real incomes to lower-tier OECD country levels. In this context, the authorities are implementing structural reforms with support from the World Bank, the EU and the African Development Bank under the Economic Competitiveness Adjustment Loan.
Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies.
On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and a summary is transmitted to the country's authorities. — (menareport.com)
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© 2003 Mena Report (www.menareport.com)
