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Tunisia: Progress of Economic Indicators Despite Tough Conditions

Tunisia: Progress of Economic Indicators Despite Tough Conditions

Tuesday, 18 February, 2020 - 10:00
Shopkeepers wait for customers in front of a souvenir shop following Thomas Cook's collapse, in Hammamet, Tunisia, September 24, 2019. REUTERS/Zoubeir Souissi
Tunis- Al Munji Al Saidani

The Tunisian Institute of Statistics reported that major economic indicators in Tunisia have witnessed progress at the beginning of this year, benefiting from the relative recovery recorded by the Tunisian economy at the end of last year.

The Institute noted that the foreign exchange reserve rose from 84 days of supply in 2018 to around 114 currently. Also, foreign debt has also witnessed a decline during last year to 66 percent of the GDP and is expected to advance in 2020 to a maximum of 63.4 percent.

In the same context, the trade deficit saw a decline of 19 percent while the inflation was controlled to reach around 5.8 percent during the last month. This percentage was achieved for the first time in years.

Tunisian exports had seen a progress of 7 percent between 2018-2019. During the same period, the ratio of exports to imports increased from 68.3 percent to 69.3 percent.

Central Bank Governor Marwan Abbasi has affirmed that this progress was due to a financial policy adopted by the bank last year. He noted that the positive results recorded by the cereal season and in the tourism sector were key reasons behind the local currency stability and controlling inflation.

Moody's rating agency reported on Friday that it has changed the outlook on the Central Bank of Tunisia's ratings to 'stable' from 'negative' and affirmed the 'B2' senior unsecured rating.

The stable sovereign issuer rating outlook "reflects the stabilization in the balance of payments and the debt burden that Moody's expects to be maintained as tighter monetary policy stabilizes the currency and fiscal policy prudence is likely to remain," the agency said.

The Central Bank's tighter monetary policy has stabilized the exchange rate and helped rein in the high ratio of debt to gross domestic product that peaked over 77 percent of GDP in 2018.

In 2019, government debt declined to 72.5 percent of the gross domestic product, mainly as a result of the appreciation of the Tunisian dinar, Moody's estimated.

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