Tunisia, IMF ‘Very Close’ to Loan Deal, Fund Official Says

Tunisia and the International Monetary Fund are “very close” to a $1.75 billion precautionary credit line, a deal the government says is key to helping buoy the nation’s economy, according to a Fund official.

Talks will continue in the “coming days,” Amine Mati, head of the IMF mission to Tunisia, told reporters today in Tunis. There may be an agreement in late May, he said, adding the Fund “did not impose reforms on Tunisia.”

Tunisia is seeking to speed up recovery after the economy stalled when President Zine El Abidine Ben Ali was ousted more than two years ago in an uprising that triggered protests across the Arab world. Political tensions have increased since the assassination of an opposition leader in February and the debt crisis in Europe has hurt trade.

The government expects the economy to expand 4 percent this year compared with 3.6 percent in 2012, Tunisian Finance Minister Elyes Fakhfakh has said.

Similar consultations took place between the IMF and Egypt, where a fund team concluded a visit without an agreement despite comments by government officials that a deal would likely be reached before the end of the mission. The Fund said it made progress on talks while Egyptian officials said they hoped talks would continue in Washington.

“Although Tunisia’s post-revolution transition has shared some of the features of Egypt’s, it has been smoother, because its fiscal position was in better shape to start with, and because it has a much smaller population,” said Liz Martins, Dubai-based senior economist at HSBC Bank Middle East Ltd. “Tunisia’s fiscal needs are actually less pressing than Egypt’s and it hopes not to have to tap the IMF money at all.”

Tunisia’s debt is rated three notches higher than Egypt at Standard and Poor’s.

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