Tunisia cuts 2020 growth forecast, eyes new IMF deal

Tunisia expects a growth rate of just 1% this year, compared with the 2.7% envisaged in the 2020 budget, and plans to seek a new loan deal with the International Monetary Fund (IMF).

Tunisian Prime Minister, Elyess Fakhfakh, who made the announcement on Sunday said his government has slashed the country’s economic growth forecast for this year to just 1%, due in part to the impact of the coronavirus crisis on tourism.

Tunisian authorities have confirmed the country’s second case of coronavirus on Sunday.

The country inked a deal with the IMF in December 2016 for a $2.8 billion loan package to overhaul its sclerotic economy, including steps to cut chronic deficits and trim bloated public services. Fakhfakh did not give details about his hopes for a new deal.

The government of the North African nation faces a major economic challenge after years of low growth, persistent unemployment, big government deficits, mounting debt, high inflation, a weak currency and deteriorating public services.

Tunisia, which remains an exceptional case in the Middle East and North Africa region in terms of struggle to preserve democracy, needs to borrow about $3 billion internationally in 2020 to meet spending commitments, at a time it is facing strong pressure from international lenders to cut spending.