28 February 2014

Tunisians Optimistic About Economic Recovery

Tunis — The Tunisian economy has gradually started recovering after the breakthrough in the political crisis, completion of the constitution and the formation of a new government.

The stock market rebounded over the first weeks of February, and the dinar exchange rate also improved, reaching 3.8 for the euro and 2.7 for the US dollar in the last days of the month.

Central Bank of Tunisia Governor Chedly Ayari confirmed in press statements that the political reform opened the closed doors for the country's economy. Ayari expects growth to reach 3.5% this year if the political and security stability continued.

Meanwhile, the European parliament on February 13th approved a 300 million euro loan for Tunisia, it will be used to support structural reforms in the national economy.

The International Monetary Fund (IMF) also released the second tranche of a 1.25 billion euro loan in January, worth about 374 million euros.

The World Bank plans to give Tunisia a $500 million (362 million euro) loan this year, including $250 million to be disbursed next month, Ayari said, adding that the EU promised a loan of 250 million euros.

For its part, the African Development Bank (AfDB) issued a communiqué on February 7th confirming it would continue to provide firm support at this critical time in Tunisia's history.

These loans give a moral boost to the Tunisian economy, economics professor Abdejalil Badri said. He added they could reflect positively on social conditions, especially if used to build development projects and create jobs for unemployed youths.

However, continued foreign support, especially from financers and investors, would require security, an end to strikes, and the introduction of reforms, especially to the banking and taxation sectors, as well as a revision of the investment law to stimulate businessmen to create projects, Badri noted.

Prime Minister Mehdi Jomaa promised after being sworn in last month to bolster security, stop the deteriorating economic condition, revive public finances and create jobs.

The Central Bank of Tunisia also vowed in a statement last month to introduce fiscal and economic reforms as soon as possible to restore the national economy to growth.

Hafedh Kammoun, 55, a retiree, said this economic improvement must be reflected in the living conditions of Tunisians.

"This government must make job creation a top priority because it's the main issue here," he said. "I think that creating more jobs for people, especially youths, will reflect positively on all fields."

In his turn, Adel Tbini, 31, a computer shop owner, said, "There are positive initiatives from overseas and many projects that we hope to see implemented on the ground so everyone can benefit."

"However, the state mustn't be extravagant and shouldn't depend on foreign loans to avoid finding itself unable to repay its debts one day," he added.

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