## Press Release: IMF Executive Board Approves a 24-month US$1.74 Billion Stand-By Arrangement with Tunisia _IMF News, June 7, 2013_ ## Source details **Canonical URL:** [Press Release: IMF Executive Board Approves a 24-month US$1.74 Billion Stand-By Arrangement with Tunisia](https://www.imf.org/en/news/articles/2015/09/14/01/49/pr13202) ## Other formats - [Markdown version](/en/news/articles/2015/09/14/01/49/pr13202/index.md) - [Structured JSON version](/en/news/articles/2015/09/14/01/49/pr13202/index.json) - [Bundle manifest](/en/news/articles/2015/09/14/01/49/pr13202/bundle-manifest.json) ## Bibliographic details - Published: June 7, 2013 --- ### Program approval and financing - The Executive Board approved a 24-month Stand-By Arrangement equivalent to SDR 1.146 billion ( US$1.74 billion) to support Tunisia’s economic reform program during 2013-2015. - An amount equivalent to SDR 98.8 million (about US$150.2 million) is available for immediate disbursement; the remaining amount will be phased in over the duration of the program, subject to eight program reviews. - The Stand-By Arrangement entails regular access to IMF resources, amounting to 400 percent of Tunisia’s quota. ### Objectives and expected outcomes - Primary objectives: strengthen fiscal and external buffers, foster higher inclusive growth, and protect the most vulnerable. - The program is expected to: reduce vulnerabilities from the international economic environment and political transition; lay foundations for a return of investor confidence; and improve the economy’s resilience to future shocks. ### Policy measures and structural reforms - Fiscal and external buffer measures: - Implement an appropriate fiscal policy that creates space for one-off costs (such as banking recapitalization) and investment spending while avoiding crowding out private-sector credit. - Pursue a prudent monetary policy aimed at containing inflation. - Maintain greater exchange rate flexibility to preserve reserves against exogenous shocks. - Banking sector reforms: - Audit public banks. - Strengthen banking supervision. - Align prudential norms with international standards. - Improve data quality and develop a bank resolution mechanism. - Fiscal and tax reforms: - Fiscal reforms to increase fiscal space through wage restraint and subsidy reform. - Comprehensive reform of tax policy and revenue administration to broaden the tax base and improve equity. - Medium-term fiscal consolidation to allow a better composition of expenditures, including sustained public investments. - Structural reforms to boost growth and inclusion: - Accelerate reforms to promote private-sector development, lower regional disparities, and reduce pervasive state intervention. - Streamline fiscal incentives and regulatory barriers, including through a new investment code and corporate tax reform, and reduce red tape. - Social protection: - Strengthen social assistance mechanisms and undertake a systematic assessment of the social impact of envisaged reforms. ### Recent developments and key challenges - Post-January 2011 revolution impacts: - Real GDP contracted by 2 percent in 2011. - Foreign direct investment (FDI) and tourism declined by more than 30 percent year-on-year. - Unemployment rose to record levels. - Recovery and financing: - The economy began a moderate recovery in 2012. - The deteriorating current account deficit was partly financed by sustained donor financing, strengthened FDI and market access, helping increase reserves (but to a level still below 2010). - Ongoing challenges: - Fragile banking sector, widespread social and economic disparities, and high youth unemployment. - Fiscal space has been reduced to meet pressing social and investment needs, although public debt remains at sustainable levels. - Addressing these challenges amid a political transition remains demanding. ### Tunisia: Selected economic indicators and projections (2009–14) - Population: 10.7 million (2012) - Per capita GDP: US$4232 (2012) - Quota: SDR 286.5 million - Poverty rate: 12 percent (2010) - Key export market: France, Italy - Literacy rate: 78 percent (2011) - Main exports: textiles, electronic and mechanical goods, energy, tourism - Production and income (Percent Change, unless otherwise indicated) - Real GDP: 2009: 3.1; 2010: 2.8; 2011: -1.9; 2012: 3.6; 2013: 4.0; 2014: 4.5 - GDP deflator: 2009: 3.3; 2010: 4.7; 2011: 5.1; 2012: 5.3; 2013: 5.6; 2014: 4.4 - Gross national savings (percent of GDP): 2009: 22.1; 2010: 21.8; 2011: 16.5; 2012: 17.3; 2013: 19.0 - Gross investment (percent of GDP): 2009: 24.9; 2010: 26.6; 2011: 24.1; 2012: 25.4; 2013: 24.7; 2014: 25.0 - Employment - Unemployment rate (end of period): 2009: 13.3; 2010: 13.0; 2011: 18.9; 2012: 16.7; 2013: ... - Prices - Consumer price index (CPI), average: 2009: 3.5; 2010: 6.0 - Consumer price index (CPI), end of period: 2009: 4.1; 2010: 4.2; 2011: 5.9; 2012: 5.0 - Central government finances (percent of GDP) - Revenue (excl. grants): 2009: 23.1; 2010: 23.3; 2011: 24.2; 2012: 23.8; 2013: 24.0 - Expenditure and net lending: 2009: 25.8; 2010: 23.9; 2011: 27.7; 2012: 28.5; 2013: 31.1; 2014: 30.3 - Fiscal balance (excl. grants): 2009: -2.7; 2010: -0.6; 2011: -3.5; 2012: -5.4; 2013: -7.3; 2014: -6.4 - Structural fiscal balance 1/: 2009: -2.3; 2010: -1.1; 2011: -2.9; 2012: -4.7; 2013: -5.0; 2014: -3.8 - Total government debt (foreign and domestic): 2009: 42.8; 2010: 40.4; 2011: 44.0; 2012: 45.3; 2013: 49.5 - Money and credit - Broad money (M3 of the financial system): 2009: 12.1; 2010: 9.1; 2011: 8.4; 2012: 12.6; 2013: 12.0 - Credit to the economy: 2009: 10.3; 2010: 19.6; 2011: 13.4; 2012: 8.7; 2013: 10.8; 2014: 11.7 - Money market rate (end of period) 2/: 2009: 4.10; 2010: 4.12; 2011: 3.53; 2012: 3.30; 2013: … - External sector - Current account balance (percent of GDP, excl. grants): 2009: -2.8; 2010: -4.8; 2011: -8.1; 2012: -7.5; 2013: -6.0 - Exports of goods, f.o.b. (in US$): 2009: -24.8; 2010: 14.0; 2011: 8.5; 2012: -5.2; 2013: 6.5 - Imports of goods, f.o.b. (in US$): 2009: -21.9; 2010: 15.9; 2011: 7.7; 2012: 1.5; 2013: 3.7 - FDI (percent of GDP): 2009: 3.0; 2010: 0.9; 2011: 3.9; 2012: 2.1; 2013: 2.5 - Gross official reserves (US$ billions, end of period): 2009: 10.6; 2010: 9.5; 2011: 7.5; 2012: 8.6; 2013: 9.0 - Gross reserves (months of imports) 3/: 2009: 5.2; 2010: 3.4; 2011: 3.8 - External debt (percent of GDP): 2009: 49.4; 2010: 48.3; 2011: 47.8; 2012: 51.6; 2013: 51.1; 2014: 54.5 - REER (index): 2009: -1.2; 2010: -0.5; 2011: -1.7; 2012: 0.0 - Memorandum items: - GDP at current prices (TD millions): 2009: 58,883; 2010: 63,397; 2011: 65,370; 2012: 71,332; 2013: 78,334; 2014: 85,465 - Notes from sources: Tunisian authorities and IMF staff estimates and projections. - Footnotes included in original: 1/ Excludes banking recapitalization costs and one-off arrears payments for energy subsidies. 2/ Latest data for current year. 3/ End-of-year reserves over next year’s imports of goods and services. *IMF Communications Department press release, June 7, 2013.* --- ## Content in this bundle - [Pr13202apdf (PDF)](/-/media/websites/imf/imported/external/arabic/np/sec/pr/2013/pr13202apdf.pdf){rel="external" type="application/pdf"} --- ## References - [Tunisia and the IMF](http://www.imf.org/external/country/TUN/index.htm) - [Press Releases](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr13202_