## Tunisia: Third Review Under the Stand-by Arrangement, Request for Modification of Performance Criteria and Waivers of Applicability

_IMF Staff Country Reports, May 19, 2014_

## Source details

**Canonical URL:** [Tunisia: Third Review Under the Stand-by Arrangement, Request for Modification of Performance Criteria and Waivers of Applicability](https://www.imf.org/en/publications/cr/issues/2016/12/31/tunisia-third-review-under-the-stand-by-arrangement-request-for-modification-of-performance-41564)

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## Bibliographic details
- Published: May 19, 2014
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484394472.002

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### Executive Summary — Key Findings
- On June 7, 2013, the Executive Board approved a 24-month SBA in an amount equivalent to 400 percent of quota (SDR 1.15 billion or about $1.75 billion).
- To date, SDR 427.92 equivalent to $659 million has been disbursed.
- The pillars of the program are to:
  - (i) achieve short-term macroeconomic stability;
  - (ii) lay the foundation for stronger and more inclusive growth; and
  - (iii) protect the most vulnerable.
- The program is broadly on track.
  - Two out of three 2013 end-December quantitative performance criteria (QPC) targets have been missed, but by a smaller margin than originally envisaged.
  - All end-March 2014 QPCs are expected to be met.
- Progress on the structural reform agenda has been slowed by last year’s political crisis and the transition between governments.
- The completion of the third review will make SDR 145.08 million (about $225 million) available.

### Context and Background
- Adoption of a new constitution and formation of a new technocratic government in January 2014 led to greater confidence on political prospects and economic reforms.
- Growth has been moderate and remains insufficient to bring down unemployment significantly in the short term.
- External and fiscal imbalances remain high, while demands for higher wages and additional jobs are rising.

### Program Strategy and Policy Recommendations
- Fiscal and monetary framework:
  - Contain current expenditures.
  - Pursue prudent monetary policy.
  - Increase exchange rate flexibility to contain high external and fiscal deficits and to build investors’ confidence.
- Financial sector reforms:
  - Improve banking regulation.
  - Adopt a strategic orientation of public banks.
  - Strengthen supervision to reduce banking sector fragilities currently hampering private sector development.
- Structural and growth-enhancing measures:
  - Scale up public investments.
  - Reform tax policy and revenue administration.
  - Accelerate public enterprise reform.
  - Protect the most vulnerable to help lay the foundations for more inclusive growth and level the playing field for investors.

### Risks to Program Implementation
- Main risks identified:
  - Regional and domestic security tensions.
  - Set-backs in the political transition.
  - Weaker economic activity in major trading partners.
- Conditionality for successful implementation:
  - Government’s ability to garner consensus among political parties backing it.
  - Government’s capacity to push reforms through vested interests.

### Subject Areas and Keywords (as listed)
- Subject: Banking, Credit, Economic sectors, Financial institutions, Government debt management, Money, Public debt, Public enterprises, Public financial management (PFM), State-owned banks
- Keywords: authority, core inflation, cost, CR, Credit, disbursement of SDR, Europe, Global, Government debt management, government participation, ISCR, project execution, Public enterprises, recapitalization, restructuring, restructuring plan, State-owned banks

*International Monetary Fund. Middle East and Central Asia Dept. "Tunisia: Third Review Under the Stand-by Arrangement, Request for Modification of Performance Criteria and Waivers of Applicability", IMF Staff Country Reports 2014, 123 (2014).*

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## Content in this bundle

- **_cr14123 - Executive Summary**
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_Source: https://www.imf.org/en/publications/cr/issues/2016/12/31/tunisia-third-review-under-the-stand-by-arrangement-request-for-modification-of-performance-41564_