Tunisia should “seal the preliminary agreement with the the International Monetary Fund (IMF) to restore fiscal sustainability to send a positive signal to private investors,” according to the African Development Bank (AfDB) report on the African Economic Outlook 2023, published on the sidelines of its annual meetings held on May 22-26 in Sharm el-Sheikh, Egypt.
«Its entry into force would unlock concessional financing from other development partners,» the AfDB points out.
Tunisia should also “adopt a medium-term public debt reduction strategy, implement a plan to restructure public enterprises and reduce state-guaranteed external debt.”
AfDB projections suggest a narrowing of the fiscal and current account deficits as a result of the National Reform Program launched in 2022, which aims to strengthen private investment, consolidate public finances and improve the performance of public enterprises.
However, this outlook could deteriorate due to the high risk of debt distress, which limits access to external financing, warns the AfDB.
According to the latest projections by Bank, Tunisia’s economic growth is expected to remain modest over the medium term, at 1.9% in 2023 and 2.8% in 2024, driven by the manufacturing and services sectors.
Inflation is expected to rise further to 9.2% in 2023 before declining to 6.8% in 2024, assuming a prudent monetary policy and an easing of external inflationary pressures.
The report adds, however, that the recovery could also be slowed by social tensions caused by rising prices in a difficult economic environment for households, restrictive fiscal policies that penalize public investment, or heightened political uncertainties.
Source: Agence Tunis Afrique Presse