Press Release No. 13/245

Press Release: Statement by IMF Director Masood Ahmed at the Conclusion of a Visit to Tunisia

July 3, 2013

Mr. Masood Ahmed, Director of the Middle East and Central Asia Department of the International Monetary Fund (IMF), visited Tunis on July 1-2, 2013, for meetings with the Head of Government Ali Laarayedh, President of the National Constituent Assembly Mustapha Ben Jaâfar, Governor of the Central Bank of Tunisia Chedly Ayari, Minister of Finance Elyes Fakhfakh, and other members of Tunisia’s economic team. At the conclusion of his visit, Mr. Ahmed made the following statement:

“It has been a great pleasure to visit Tunisia and to have a productive exchange of views with the country’s leadership, most of the economic team, and various stakeholders. We discussed the pressing economic and social challenges facing the country, the government’s economic reform program, and how the IMF can best support Tunisia at this important juncture. I also held enriching discussions with representatives of the trade unions and the business community, as well as parliamentarians and civil society.

“During my discussions, I had an opportunity to stress the IMF’s commitment to supporting Tunisia during its historic transition, and the importance that we attach to promoting strong, sustainable and inclusive growth to respond to the aspirations of Tunisia’s society, especially its young people.

“Tunisia’s recovery is continuing at a modest pace, with risks to the near-term outlook heavily dependent on the unfolding of the political transition and developments in Tunisia’s main trade partners. The legacy of widespread social and economic disparities, high unemployment, together with widening external and fiscal deficits and a fragile banking sector, are pressing challenges that need to be addressed.

“The swift implementation of Tunisia’s home-grown reform program aimed at stabilizing the economy in the short term, fostering higher and more inclusive growth, and protecting the most vulnerable, is essential for restoring investors’ confidence, strengthening foreign reserves, and making the economy more resilient to adverse economic developments. Important steps have already been taken to reduce vulnerabilities through tighter monetary policy to contain inflation, greater exchange rate flexibility, and the streamlining of energy subsidies to preserve fiscal sustainability.

“Moving forward with addressing significant vulnerabilities in the banking sector, increasing growth-supporting public investments and implementing comprehensive structural reforms – including the corporate tax reform and a new investment code – will promote private sector- led growth and reduce regional economic and social disparities. Strengthening of social safety nets will be essential to protect the most vulnerable from the impact of reforms.

“Tunisia’s long-term growth potential is substantial. The implementation of the envisaged structural reforms, together with the country’s own strengths – a highly educated labor force and an open economy – will allow Tunisia to unleash this potential and achieve higher and more inclusive growth.

“The IMF remains fully committed to supporting these efforts through financing under the recently approved Stand-By Arrangement, policy advice and technical assistance.”