Tunisia is well positioned to benefit from the recovery in global economic activity expected for 2004, which may lead to an acceleration of non-agricultural activity, according to concluding comments issued by the International Monetary Fund (IMF) after a recent Interim Staff Mission.
According to the fund, sustainable growth will depend on economic policies aimed at addressing a series of major challenges. The Arab state will have to find ways to take advantage of the expected economic upturn in order to reduce the fiscal deficit in 2004 and to pursue the objective of reducing public debt as a share of gross domestic product (GDP) to below 50 percent in the medium term.
In the coming year, the Tunisian government will have to continue ongoing efforts to strengthen monetary policy with a view to increasing exchange rate flexibility and maintain the nation’s competitiveness, said the IMF. Leadership must also create the necessary conditions for a recovery of private investment, crucial to underpin higher growth and reduced unemployment.
Tunisia is maintaining its prudent fiscal policy despite difficult conditions. The IMF projects the fiscal deficit to decline from 3.5 percent of GDP in 2002 to 3.3 percent in 2003, allowing a reduction in public debt from 61.5 percent of GDP at end-2002 to 59.5 percent this year. Excluding onlending, which increased substantially during the year, the deficit would amount to approximately 2.9 percent of GDP, close to the original objective in the 2003 budget.
IMF missions are undertaken as part of regular consultations under Article IV of the fund’s Articles Agreement in the context of a request to use IMF resources as part of discussions of staff monitored programs, and as part of other staff reviews of economic developments. — (menareport.com)
© 2004 Mena Report (www.menareport.com)
