Tunisia: Fourth Review Under the Stand-by Arrangement and Request for Modification of Performance Criteria
IMF Staff Country Reports, September 15, 2014
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- Tunisia: Fourth Review Under the Stand-by Arrangement and Request for Modification of Performance Criteria
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Bibliographic details
- Published: September 15, 2014
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781498350761.002
Context
- On June 7, 2013, the Executive Board approved a 24-month Stand-By Arrangement in an amount equivalent to 400 percent of quota (SDR 1.146 billion or about $1.75 billion).
- To date, SDR 573 million equivalent to $877 million has been disbursed.
- Program pillars:
- (i) achieve short-term macroeconomic stability;
- (ii) lay the foundation for stronger and more inclusive growth;
- (iii) protect the most vulnerable.
Background and recent developments
- Political transition progress has led to increased donor support this year, including from regional partners.
- Economic developments:
- Growth remains timid.
- Headline inflation has increased.
- Rising external imbalances have continued to put pressure on foreign reserves.
- Program implementation to date:
- All quantitative performance criteria have been met.
- Authorities have made up for key delays on structural reforms including reforming public banks, setting up a household support program, and advancing the tax administration modernization agenda.
Program strategy and policy recommendations
- Macroeconomic policy stance to sustain and intensify:
- Prudent fiscal policy.
- Tighter monetary policy.
- Greater exchange rate flexibility.
- Policy objectives:
- Contain high external and fiscal deficits.
- Anchor inflationary expectations.
- Bolster investor confidence, which remains lackluster.
- Financial sector measures:
- Important steps taken to strengthen the financial system, notably with the design of public bank restructuring plans.
- Emphasis that implementation of restructuring plans will be key.
- Structural reform priority:
- Progress on structural reforms—particularly to improve the business climate—is critical to create conditions for private sector-led and inclusive growth.
Risks and implementation challenges
- Main risks to program implementation:
- Regional and domestic security tensions.
- Setbacks in the political transition.
- Weaker economic activity in major trading partners.
- Additional implementation constraints:
- A difficult social environment.
- Opposition from vested interests.
Financial implications of the fourth review
- Completion of the fourth review will make SDR 143.25 million (about $220 million) available.
International Monetary Fund. Middle East and Central Asia Dept. "Tunisia: Fourth Review Under the Stand-by Arrangement and Request for Modification of Performance Criteria", IMF Staff Country Reports 2014, 277 (2014).
Content in this bundle
- _cr14277
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