International Monetary Fund

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Program note


Last Updated: September 30, 2013

Current Program Status:

A 24-month Stand-By Arrangement (SBA) in the amount of SDR 1.146 billion (US$1.74 billion, amounting to 400 percent of Tunisia’s quota), approved by the Executive Board of the IMF on June 7, 2013.


Following the January 2011 revolution and the ensuing sharp decline in economic activity, the Tunisian economy embarked on a moderate recovery in 2012 and the first half of 2013. Fiscal space has been reduced through higher wages and subsidies and pressing investments, although public debt remains at sustainable levels. The deteriorating current account deficit—caused partly by falling demand from Europe—has been financed by sustained donor financing, FDI, and market access, which helped increase reserves (though these are still below pre-crisis level).

Widespread social and economic disparities, high unemployment, and a fragile banking sector are key challenges that need to be addressed at a time when the political transition is ongoing, domestic tensions remain high, and the international economic environment remains uncertain.

Role of the IMF

The Tunisian authorities have designed a comprehensive program to achieve short-term macroeconomic stabilization and address these challenges by fostering stronger and more inclusive growth and protecting the most vulnerable.The implementation of this home-grown stabilization and reform program, together with the IMF’s financial support, will help restore investors’ confidence and make the economy more resilient in the event of adverse economic developments. Key elements of the program strategy are to: (i) build up fiscal and external buffers with appropriate fiscal, monetary, and exchange rate policies; (ii) help to support growth by addressing critical vulnerabilities in the banking sector and by improving the investment climate through reforms of the tax and investment regimes; and (iii) strengthen social safety nets to protect the vulnerable.

The IMF is also supporting Tunisia by providing technical assistance in building capacity for tax policy and revenue administration, strengthening the central bank’s supervision capacity and collateral framework, and improving the production of monetary statistics.

The Challenges Ahead

The key challenges facing the authorities are to:

  • Address the vulnerabilities of the banking sector by conducting the audit of public banks, strengthening banking supervision, and aligning prudential norms with international standards.
  • Achieve a better composition of public expenditures by increasing growth-supporting investments and social spending, which includes spending for social safety nets, through controlling the wage bill and reducing ill-targeted subsidies;
  • Foster higher and more inclusive growth to create high-value-added jobs and reduce regional inequalities, by implementing a comprehensive structural reform agenda to promote private-sector development (including corporate tax reform and a new investment code).