The recovery of the Tunisian economy continues in 2004, driven by strong agricultural output, the return to normal tourism levels, and the positive performance of non-energy exports.
According to a recent IMF report, growth is expected to exceed 5½ percent. The external current account deficit is projected at 2½ percent of GDP, ½ percentage point of GDP lower than in 2003. This, together with significant privatization receipts, will enable Tunisia to reduce external debt by 5½ percentage points of GDP (to 59 percent) while maintaining a level of reserves equivalent to three months of imports of goods and services.
Although the rate of inflation began to pick up in 2003, it appears to have resulted from adjustments in administered prices and higher prices for certain food products unrelated to demand pressures.
In the years ahead, Tunisia should solidify the foundations for strong and sustained growth. Long-term growth rates of more than 6 percent will be needed to reduce unemployment.
In addition, a per capita growth differential of 2-4 percent would be required to catch up with countries like Mexico and Poland (on purchasing power parity terms) within a decade. To accomplish this, it will be necessary to transform the Tunisian economy in the context of growing external openness. The imminent expiration of the Multifiber Agreement and the gradual depletion of oil reserves make this transformation all the more necessary, the IMF report added. (menareport.com)
© 2004 Mena Report (www.menareport.com)
