Tunisia slashes economic forecast
The government in Tunis has decided to reduce its 2013 economic growth expectations after another evaluation. The previous 4,5% economic growth forecast has been reduced to 4%, because authorities believe the situation in Tunisia and the ongoing crisis in Europe will make it difficult to attain.
Without pointing out any specific event within the borders of the country, Economic Minister Elyess Fakhfakh said that “because of some reasons, including the crisis in Europe and crisis at home we decided to reduce expectations for growth in 2013 by 0.5% to 4%, compared with 4.5% expected.”
The government is also hoping to cut its budget deficit by almost a percent after it announced plans to cut it to 5,1% of gross domestic product compared with the previous target of 5,9%. Inflation has been on the rise in the country and it reached its highest mark, 6,5%, last month for the past five years. Food prices have been highly affected. The economy is struggling due to the slowdown in the euro zone, the main market for Tunisia’s exports and the source of most of its tourists.
The country’s economic and financial crisis began after the forceful departure of Ben Ali at the beginning of the Arab Spring two years ago. The assassination of secular opposition politician, Chokri Belaid, almost dragged the country into a political crisis in February.
The government has almost reached an agreement with the International Monetary Fund for a precautionary loan of $1.75 billion. Expectations are high that it will be finalized next month. Some investors are waiting for the deal to be concluded before they go into the Tunisian market as the country goes through its transitional period with risks considered to be high.