The International Monetary Fund (Fund) forecast a 2.3% growth for the Tunisian economy this year after a relatively sluggish year in 2016. The new forecast will be mainly driven by the tourism and phosphate sectors.

Yet, the Bretton Woods institution stresses on the fragility of the economy of this country which is currently experiencing a particularly complex socio-political situation. The Fund also highlights structural drawbacks and an overvalued exchange rate which do not favor investment, in a context where trust in the country is still weak, two years after the terrorist attacks that hurt the economy.

External shocks and the blunders during implementation of new policies widened the budget deficit to more than 10% of the country’s gross domestic product (GDP) in the first quarter of the year. Moreover, dinar’s depreciation (-23% of its nominal value since the end of 2015) and global rise of prices pushed the Central bank to raise its interest rates to 5% last month, to keep inflation below 5% this year, IMF said.

Aaron Akinocho