Tunisia: Inflation Rate Plummets Below 6 Percent

Published February 4th, 2020 - 05:58 GMT
Tunisia: Inflation Rate Plummets Below 6 Percent
He also expected more control over inflation “to improve Tunisians’ purchasing power.” (Shutterstock)
Highlights
Tunisia’s successive governments have tried to confront inflation which is a major obstacle for development.

The inflation rate dropped below six percent end of January, for the first time in several years, said Tunisia's Central Bank (BCT) Governor Marouane Abassi.

Speaking at the inauguration of the international academy of the professional occupation and finance, Abassi affirmed that the inflation rate did not exceed 5.8 percent, compared to 6.1 percent in December 2019.

The improvement in the performance of some sectors and economic activities, such as tourism and agriculture, as well as the control of imports have contributed to limiting inflation.

Tunisia’s successive governments have tried to confront inflation which is a major obstacle for development.

The current monetary policy, which is based on raising the interest rate to reduce inflation, had paid off, Abassi noted.

He also expected more control over inflation “to improve Tunisians’ purchasing power.”

The inflation rate remained at 6.7 percent in 2019, dropping from 7.3 percent in 2018.

The rate of economic inflation in Tunisia has witnessed a descending pattern since the beginning of 2019.

It started with 7.1 percent in January 2019 and dropped to 6.5 percent in July and remained stable at the level of 6.7 percent during August and September.

In December, indicators on the state controlling the rate of inflation became clear after Tunisia’s National Institute of Statistics recorded a local inflation rate of no less than 6.1 percent, after it was in the range of 6.3 percent in November.

Experts at the Institute said this decline was due to a drop in the growing rate of food prices.

Prices of foods fell to the level of 5.8 percent after reaching 6.3 percent during August and September.

Meanwhile, the African Development Bank expected in its report, dubbed African Economic Outlook 2020, that Tunisia will achieve a growth rate of no less than 2.1 percent during 2020 and will reach 2.5 percent in 2021.

Tunisia’s Ministry of Finance announced on Friday that it has borrowed 455 million euros ($504 mln) from local banks to support the country’s budget.

The government said it struggles to borrow about $4.3 billion this year.

Prime Minister designate Elyes Fakhfakh, proposed this month by President Kais Saied, hopes to form a coalition government next week.

Tunisia needs about $4.3 billion of loans this year including $1.3 billion from the local market.

The finance ministry said that the loan will help stabilize the Tunisian currency and finance the state budget.


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