## Press Release: Statement by the IMF Mission on the 2007 Article IV Consultation with Tunisia

_IMF News, June 6, 2007_

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**Canonical URL:** [Press Release: Statement by the IMF Mission on the 2007 Article IV Consultation with Tunisia](https://www.imf.org/en/news/articles/2015/09/14/01/49/pr07121)

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## Bibliographic details
- Published: June 6, 2007

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### Mission, timing, and meetings
- IMF mission headed by Mr. Abdelhak Senhadji in Tunis from May 14, 2007; statement issued May 28, 2007 at conclusion of the consultation.
- Report to be discussed for approval by the Executive Board of the IMF in July 2007; preliminary conclusions and final report to be published on the IMF's website.
- Mission held wide-ranging discussions with:
  - His Excellency Mr. Baccar, Governor of the Central Bank of Tunisia;
  - His Excellency Mr. Kechiche, Minister of Finance;
  - His Excellency Mr. Jouini, Minister of Development and International Cooperation;
  - His Excellency Mr. Zenaidi, Minister of Trade and Handicrafts;
  - His Excellency Mr. Laroussi, Minister of Employment;
  - His Excellency Mr. Chelbi, Minister of Industry, Energy, and SMEs;
  - His Excellency Mr. Haddad, Minister of Tourism;
  - His Excellency Mr. A Chaouch, Minister of Social Affairs.
- Mission also met representatives of the banking sector, business community, and social partners.

### Recent performance and macroeconomic indicators
- Growth and inflation:
  - Real GDP growth moved from 4 percent in 2005 to 5.4 percent in 2006.
  - Inflation spiked in 2006 due to soaring international oil prices; monetary tightening in the second semester reduced inflation to 2.4 percent on average over the first four months of 2007.
- External sector and debt:
  - Current account deficit increased from 1.1 percent in 2005 to 2.3 percent in 2006, driven by rising oil prices.
  - Excluding energy, the current account balance is near equilibrium.
  - Balance of payments recorded a surplus, partly attributable to privatization receipts.
  - Total external debt (including short-term debt) fell from 65.4 percent of GDP in 2005 to 59.1 percent of GDP in 2006, due in part to the use of privatization receipts.
- Fiscal and financial sector:
  - Budget deficit for 2006 is estimated at 2.9 percent of GDP, below the 3.6 percent projected in the Budget Law.
  - Banking sector prudential indicators improved: nonperforming loans (NPLs) declined from 24 percent of total loans in 2003 to 19.2 percent in 2006.
- External recognition:
  - Davos Forum ranked Tunisia as the most competitive country in the region.
  - Japanese agency R&I raised Tunisia sovereign rating from BBB+ to A- in 2007.

### Short- and medium-term outlook and projections
- Growth and inflation projections:
  - Growth in real GDP is expected to accelerate, reaching 6 percent in 2007.
  - Inflation should be around 3 percent.
- Fiscal and current account outlook:
  - The budget balance and current account balance are not expected to change significantly in the short term.
- Structural outlook:
  - The short-term and medium-term outlook remains favorable.

### Challenges and labor market dynamics
- Unemployment:
  - Unemployment rate remains relatively high, particularly among young university graduates entering the active population in growing numbers.
  - To reduce the unemployment rate below 10 percent, growth must increase significantly and be better geared toward creating more jobs for university graduates.
- Growth and employment linkage:
  - The XIth five-year plan aims to boost growth from 4¾ percent per year over the past decade to about 6.1 percent over the next five years.
  - This anticipated growth acceleration is expected initially to stabilize or slightly reduce unemployment, before lowering it significantly during the subsequent five-year period.

### Strategy and policy priorities recommended by the mission
- Overall strategic objective:
  - Move the Tunisian economy toward a knowledge-based, high-value-added economy.
- Four key elements of the authorities' strategy:
  - Strengthen Tunisia's macroeconomic position;
  - Continue the gradual liberalization of the Tunisian economy;
  - Stimulate private investment, particularly in high-value-added sectors;
  - Pursue reforms, with particular attention to education and training systems.
- IMF mission focus:
  - Strengthening Tunisia's macroeconomic position and the necessary reforms to boost growth in the context of deeper integration into the world economy.

*IMF Press Release: Statement by the IMF Mission on the 2007 Article IV Consultation with Tunisia (June 6, 2007).*

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## References

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_Source: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr07121_