Press Release: Statement by IMF Deputy Managing Director Murilo Portugal at the Conclusion of his Visit to Tunisia
IMF News, April 6, 2007
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Bibliographic details
- Published: April 6, 2007
Visit and purpose
- Statement date and location: April 6, 2007 in Tunis.
- Speaker: Mr. Murilo Portugal, Deputy Managing Director of the International Monetary Fund (IMF).
- Purpose: Concluding statement summarizing meetings with Tunisian authorities and assessment of Tunisia’s economic situation and policy priorities.
Recent economic performance
- Annual real GDP growth averaged about 5 percent during the past decade.
- Tunisia’s GDP per capita is described as among the highest in the region.
- The IMF supported Tunisia with technical assistance and policy advice.
Medium-term objective and 11th Plan strategy
- Key medium-term objective: substantially reduce unemployment by significantly raising the already strong growth rate of the economy.
- The strategy in the 11th Plan is characterized as ambitious yet achievable if the pace of reforms is accelerated along three main axes:
- Consolidate Tunisia's economic position further.
- Strengthen the financial sector.
- Continue regional and global integration.
Policy recommendations and reform priorities
- Further liberalization and improvement in the business climate to promote domestic and foreign investment.
- Further reduction in external debt; authorities plan to allocate a large proportion of privatization receipts for early repayment of the external debt.
- Continue fiscal consolidation through increased efficiency in spending and broadening of the tax base.
- Pragmatic approach to liberalizing the capital account is commended.
- As liberalization advances:
- Increase two-way flexibility of the exchange rate.
- Rely more on indirect monetary instruments.
- Deepen money and foreign exchange markets.
- Increase the efficiency of monetary policy.
- Set the stage for an inflation-targeting framework.
- Central Bank progress: the new central bank law constitutes a significant step toward clarifying the monetary policy objective.
Financial sector priorities
- Strengthening the financial sector is a priority.
- Specific focus on reducing the level of non performing loans.
- Encouraged by progress in implementing most recommendations of the Financial Sector Assessment Program conducted in collaboration with the IMF and the World Bank.
Regional and global integration
- Tunisia is actively promoting regional and global cooperation.
- Association Agreement with the European Union provides for eliminating tariffs on manufactured goods by 2008.
- Support for Maghreb integration and recent IMF-endorsed initiatives.
- Several bilateral free trade agreements recently signed.
- Note: Most Favored Nation (MFN) tariffs have been significantly reduced, but they remain relatively high.
Transparency and statistical practices
- Commended Tunisia’s support for transparency in policy making.
- Authorities have systematically published all IMF documents on Tunisia.
- Tunisia subscribes to the IMF Special Data Dissemination Standard.
Source: Press Release No. 07/65 — Statement by IMF Deputy Managing Director Murilo Portugal, April 6, 2007.