IMF Executive Board approves a 24-month US$1.74 Billion stand-by arrangement with Tunisia

TunisiaTUNIS, Tunisia, June 10, 2013 – African Press Organization (APO) – The Executive Board of the International Monetary Fund (IMF) today approved a 24-month Stand-By Arrangement for an amount equivalent to SDR 1.146 billion ( US$1.74 billion) with Tunisia to support the country’s economic reform program during 2013-2015 aimed at strengthening fiscal and external buffers, and fostering higher inclusive growth. As a result of the Board’s decision, an amount equivalent to SDR 98.8 million (about US$150.2 million) is available for immediate disbursement, and the remaining amount will be phased in over the duration of the program, subject to eight program reviews. The Stand-By Arrangement entails regular access to IMF resources, amounting to 400 percent of Tunisia’s quota.

Following the Executive Board discussion on Tunisia, Ms. Nemat Shafik, Deputy Managing Director, and Acting Chair, said:

“Tunisia has embarked on a moderate economic recovery while facing a challenging international economic environment and pursuing a political transition. A fragile banking sector, pressing social demands, widespread regional disparities, and high unemployment are key challenges, together with widening external and fiscal deficits.

“The Tunisian authorities have developed a comprehensive economic program to address these challenges. The program aims to strengthen fiscal and external buffers, while laying the building blocks for stronger growth and protecting the most vulnerable.

“The authorities have already taken important measures to reduce vulnerabilities, notably through tighter monetary policy, greater exchange rate flexibility, and reduced subsidy cost. Planned fiscal reforms focus on increasing fiscal space for critical investment and social spending through wage restraint and subsidy reform, while social safety nets will be strengthened. A comprehensive reform of tax policy and revenue administration will help broaden the tax base and improve equity.

“The authorities are taking decisive action to address banking system fragilities. Priorities in this area are the audit of public banks, strengthening banking supervision, and aligning prudential norms with international standards. Efforts will continue to improve data quality and develop a bank resolution mechanism.

“Structural reforms will be accelerated to support high and inclusive growth, boost employment, and reduce regional disparities. The authorities are committed to streamlining fiscal incentives and regulatory barriers, including through a new investment code and corporate tax reform, as well as a reduction in red tape.

“The authorities’ program—supported by a two-year Stand-by arrangement—will help strengthen investor confidence and the resilience of the economy. With full implementation of the program, Tunisia will be in a better position to respond to future shocks and meet the pressing needs of its population.”

 

 

SOURCE

International Monetary Fund (IMF)

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