Tunis/Tunisia — The visit of a delegation from the International Monetary Fund (IMF) to Tunisia from December 5 to 17 is a "positive" signal that indicates a reconnection between the two sides, the governor of the Central Bank of Tunisia, Marouane El Abassi, said on Saturday.
In an interview with TAP on the sidelines of the annual meetings of the IMF and the World Bank held in Marrakech (Morocco) from October 9 to 15, El Abassi noted that this visit will be under Article IV of the IMF's Articles of Agreement, related to review the performance of the Tunisian economy and issue a report for that purpose.
He added that the review based on Article IV is carried out by all IMF member countries, including strong economies such as the United States of America, and Tunisia is no exception, especially "since we have not done so for two years".
The senior official of the Central Bank of Tunisia, who attends these meetings as Tunisia's governor at the Fund, pointed out that the reforms discussed with the international lending institution were enshrined and applied in the 2023 Finance Law.
He mentioned the increase in the value-added tax for the liberal professions, noting that these reforms have led to the achievement of profitability at the level of tax collection.
Abbasi explained that Tunisia was in a post-crisis situation in October 2022, when it received the IMF's approval for an extended financing programme worth $1.9bn at the expert level, and was suffering from the increase in fuel and food prices caused by the Russian-Ukrainian war at the global market level.
However, between October 2022 and October 2023, the balance of payments deficit narrowed, reaching about 8.6 percent at the end of 2022 and currently standing at 2.1 percent. This deficit will not exceed 4 per cent by the end of 2023, "a figure the country has not been able to achieve for years," he pointed out.
"If we exclude the deficit in the energy balance, we will move from a deficit to a surplus in the balance of payments. If we work harder on the energy transition and restore the former production and export of phosphate, it will be possible to overcome this deficit," said El Abassi.
Tunisia has been able to reduce the deficit thanks to improved exports in the textile, clothing, industrial, mechanical and olive oil sectors... in addition to the improved performance of the services sector, the most important of which is tourism and remittances from Tunisians abroad.
According to Abbasi, the country has also paid various bills related to its purchases and debts and, according to him, is also able to pay the largest instalment of them at the end of October 2023, estimated at more than 500 million euros.
Accordingly, the governor of the Central Bank recalled what the Managing Director of the International Monetary Fund, Kristalina Georgieva, said recently that Tunisia was not at the point of restructuring its debt.
Abbasi said that Tunisia has managed to contain and reduce inflation, although it is still at a high level in the range of 9.3 per cent, noting that at some point during the year it reached the level of 11.3 per cent.
He added that Tunisia's performance at this level was better than that of a number of other countries (such as EU countries), which caused this imported inflation.
The governor predicted a further decline in Tunisia's inflation rate at the end of 2023, despite the increase in the number of tourists this season (increased demand in the face of insufficient supply) and the decline in agricultural performance due to the drought wave.
He also stressed that "the availability of foreign exchange reserves, currently equivalent to 120 days of imports, is a good indicator in the current circumstances".
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All these positive indicators demonstrate Tunisia's ability to cope with the difficult economic situation," he said.
He pointed out that it was necessary to return to a higher pace of investment and a higher level of exports, while at the same time boosting domestic consumption, especially the consumption of local products.
For Marouane El Abassi, "we must carry out reforms (which are essential) to restore the growth rate and to enable Tunisia to build an inclusive and sustainable economy that takes account of climate change, with or without the IMF".
The Governor recalled that before the "Revolution of December 17, 2010 / January 14, 2011", Tunisia had good growth rates and important economic indicators, and yet the revolution took place because the country's economy was not inclusive of all groups and entities.
"It must therefore implement socially acceptable reforms and maintain its capacity to withstand various shocks."
Translated by Samir Ben Romdhane
