- The Tunisian economy is set to recover significantly from last year's shocks in the tourism and agriculture industries. Despite these shocks, Tunisia experienced a GDP growth of 1.7 percent last year, set to increase to 5.5 percent in 2003.
The International Monetary Fund (IMF) today presented its findings after is had sent a mission to Tunisia in May to study the country's economic situation and trends. The IMF mission praised "the resilience of the Tunisian economy, faced with a difficult international situation, a drop in tourism, and crops severely affected by drought."
This, said the IMF analysts, "attest not only to the success of economic reforms undertaken in the last ten years, but also shows a sure hand in macroeconomic management." Nevertheless, major challenges remained for Tunisia's economic policy. "In the short term, Tunisia will need to position itself to take advantage of the global economic recovery following the current slowdown," the IMF assessment said.
The current uncertain world economic environment was likely to continue, with business in Europe and the United States expected to recover only slowly, IMF says. The global situation for recovery was therefore not the best at a short-term outlook.
- Nevertheless, the regional impact of the Iraqi conflict appears to be less severe than anticipated, IMF analysts say. The recovery of exports in the first four months of the year had suggested the possibility of faster growth in the non-agricultural sector, which, together with a good harvest, "would boost overall GDP growth to 5.5 percent in 2003, up from 1.7 percent in 2002."
The medium-term scenario further reflected the Tunisian government's "ambitious objectives in terms of growth and the creation of employment," the IMF said.
The slump in economic growth in 2002 had highlighted the need for measures aimed at maintaining sustained growth in the medium term and reducing the vulnerability of the Tunisian economy to exogenous shocks, which Tunisian authorities cannot control. This includes the tourism sector and the rain-fed agricultural sector.
At present, the job creation needed to reduce unemployment and significantly boost per capita income would require an acceleration in growth to an annual average of 6.5 percent in the 2004-2008 period, the IMF analysts hold. However, the enhanced productivity and investment required to achieve these objectives were posing "major challenges."
The IMF therefore recommended two measures for Tunisian authorities: First, the implementation of a plan to strengthen macroeconomic policies in a context of increasing integration of the Tunisian economy with international financial markets. Second, Tunisia should accelerate its structural reforms to boost the overall productivity of production factors.
- The challenges Tunisia faces to boost productivity and attract investment call for the acceleration of structural reforms, the IMF holds. This in particular included "the privatisation of the Union Internationale des Banques (UIB), the preparation for privatising Banque du Sud (BS), the insurance sector restructuring, and the preparation for phasing out import monopolies."
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