TUNISIA: International Monetary Fund (IMF) says it's very close to a 1.75 billion U.S dollar loan deal with Tunisia

Record ID: 402427

  • Title: TUNISIA: International Monetary Fund (IMF) says it's very close to a 1.75 billion U.S dollar loan deal with Tunisia
  • Date: 16th April 2013
  • Summary: TUNIS, TUNISIA (APRIL 16, 2013) (REUTERS) HEAD OF INTERNATIONAL MONETARY FUND (IMF) MISSION TO TUNISIA AMINE MATI, CENTRAL BANK GOVERNOR CHEDLY AYARI AND FINANCE MINISTER ELYESS FAKHFAKH ENTERING NEWS CONFERENCE HALL / TAKING SEATS WIDE OF NEWS CONFERENCE HALL WITH OFFICIALS SEATED CHEDLY AYARI (RIGHT) AND AMINE MATI SEATED AHEAD OF GIVING NEWS CONFERENCE (SOUNDBITE) (Ara
  • Embargoed: 1st May 2013 13:00
  • Keywords:
  • Location: Tunisia
  • Country: Tunisia
  • Topics: International Relations,Economy,Politics
  • Reuters ID: LVA6X4P4Z46HBY2DUDOTIYTLW25X
  • Story Text: The International Monetary Fund (IMF) is very close to reaching an agreement with Tunisia on providing a precautionary credit line worth 1.75 billion U.S dollars, a senior IMF official told reporters on Tuesday (April 16).
    Tunisia has asked for IMF support to ease financial problems suffered since a revolution that toppled the former regime two years ago; a deal was delayed by political uncertainty after the killing in February of opposition politician Chokri Belaid.
    Tunisia's Central Bank Governor, Chedly Ayari told reporters the deal could be signed next month.
    "The signature will take place after the meeting of the Board of Directors (of the IMF) in the middle or end of May. Then it (the loan) will become operative. So, the schedule is clearer now," said Ayari.
    Amine Mati, head of an IMF mission to Tunisia, said talks on the precautionary credit line were at a very advanced stage and would continue in the coming days, adding that the IMF was pleased by economic reforms in Tunisia and was not imposing policies on the government.
    "There are no imposed conditions on the economic reform plan. Politically, this is a sovereign decision, we do not even discuss it," he said.
    On Monday (April 15), a senior Tunisian official who declined to be named, said an agreement on the loan had effectively been reached, and it would be signed next month.
    Although it has not publicly commented in detail on the policies which it wants Tunisia to adopt, the IMF is believed by analysts to want cuts to fuel and food subsidies to strengthen state finances - policies which are politically sensitive.
    Mati also added he expected Tunisia's economy to grow by about four percent this year.
    "We think the 2013 growth rate will reach four percent. This would be possible thanks to public investment, private investment recovery and also encouraged by the latest wage increase that boosted domestic demand."
    The loan is needed to shield Tunisia's economy from global economic woes, including the debt crisis in Europe.
    But several political parties, including the hardline Islamist Ettharir Party and the Popular Front party, oppose the loan, saying it violates the sovereignty of Tunisia on issues such as subsidy reform.
    The Tunisian government, led by the Islamic Ennahda Party, expects the economy to grow 4.5 percent this year against 3.6 percent last year.
    Moody's Investors Service cut Tunisia's credit rating to junk territory in February, joining the other two major rating agencies, and the cost of insuring Tunisian debt against a default jumped to a four-year high - exceeding levels seen during the turmoil of the 2011 revolution.
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