Struggling Tunisia to seek new IMF aid

GMT 18:25 2015 Wednesday ,09 September

Arab Today, arab today Struggling Tunisia to seek new IMF aid

IMF chief Christine Lagarde(C)
Tunis - AFP

Tunisia, whose economy has languished since the country's longtime dictator was ousted nearly five years ago, is to ask the IMF for a new aid package, the central bank chief said Wednesday.

Chedly Ayari, speaking at a news conference with visiting International Monetary Fund chief Christine Lagarde, said the amount sought would at least equal a $1.7-billion (1.5-billion-euro) credit line granted in 2013.

That loan was to have expired in June, but the IMF extended it for another seven months to give Tunis more time to adopt needed reforms.

Ayari said $1.7 billion was the "lowest estimate, and it could be more, depending on our needs, the possibilities and the conditions".

He said he hoped negotiations could start in November, so the aid could be available by March.

On Tuesday, Lagarde had urged Tunisia, whose vital tourism sector has been hard hit this year by deadly Islamist violence, to press ahead with the "vast number" of pending economic reforms.

While noting difficult international economic conditions and the negative effects of attacks on the national museum and a popular tourist resort, she said Tunisia was "proving its resilience".

"To maintain growth, create the conditions of prosperity and, above all, create employment, it is imperative to maintain security, macroeconomic and financial stability so that confidence can be restored" among domestic and foreign investors, she said.

Lagarde said this required a solid banking system as well as an efficient public administration, a fair tax system and a business climate that was open to competition while also providing modern social protections.

She said she was "confident... in Tunisia's ability to meet these challenges".

On Wednesday, she expressed openness to work with Tunisia on a new programme and indicated that Tunis would get a favourable hearing, but said she didn't want to give them impression she was pressing for one.

"I simply say 'Let's finish the work underway'... and then, inshaallah (God willing).

"There is a lot of work to be done, and there can be no dawdling along the way. It is necessary to really work and to consider that these economic reforms are a priority, decisive."

Finance Minister Slim Chaker pointed out that Tunisia had already adopted some reforms and was "making progress" on others. In particular, he mentioned a new investment code and a modernisation of the customs regime.

GDP grew by a modest 1.0 percent in the first half, but the full-year figure is expected to be only half a percent, the finance ministry has said.

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