Tunisia-IMF: Tunisia emerges from the pack, but employment remains the absolute challenge
19 June 2009
Read by 1416 persons
For the second time, the International Monetary Fund (IMF) chooses Tunisia to present its Regional Outlook Report for the Maghreb and the Middle East. The tone is much less prescriptive and the approach less prescriptive, even flexible, which surprised even those whose job it is to deal with this international financial institution.
Should this new line be attributed to the crisis, so as not to add to the woes of those who suffer it, or to the credit of the IMF's new general management? In any case, the Deputy Director of the Middle East and Central Asia Department, Amor Tahari, while agreeing that this is the case, claimed, without convincing many, that the Fund has, since its creation more than 60 years ago, been dedicated to providing its members with advice and recommendations.
The fact remains that the growth prospects in the MENA countries are clearly less bad than elsewhere, particularly the European Union, insofar as the growth rate in all the countries that make up this group is positive, i.e. above zero, varying between 1.1% and 4.4% for 2009. This is particularly the case in Tunisia, where the expected GDP growth rate this year is 3.3%, rising to 3.8% in 2010, second only to Morocco with 4.4% in 2009 and 2010. In these two countries, this rate could improve thanks to an exceptional harvest this year.
The IMF official, who is in Tunisia heading an IMF delegation for an Article IV mission, refrained from saying more, pending the publication of the mission's conclusions, but it was easy to understand that the forecast rate should be revised slightly upwards, even if Amor Tahari took care to specify that everything will depend on how the recovery plan will ultimately be implemented and its impact on the Tunisian economy.
Nevertheless, the slowdown in growth in non-oil-producing countries, including Tunisia, is due to a decline in exports, tourism revenues, remittances and FDI, while in the case of oil-exporting countries, it is due in particular to the contraction in oil and gas exports.
In this configuration, inflation is the most positive sign, being the lowest in the Maghreb, particularly in Tunisia and Morocco where the cost of oil imports has fallen sharply, as has the budget balance, where deficits are only likely to increase slightly given the limited fiscal space.
Other areas where the Maghreb countries are relatively safe are the evolution of stock market indices, where the fall is less pronounced (-7%) in Tunisia and (-21%) in Morocco, while it reaches -59% in Egypt and -46% in Qatar, in addition to the differences in sovereign rates, which have widened but remain lower in the Maghreb.
However, unemployment is the biggest challenge, as it is expected to worsen. The IMF's recipe is clear: jobs must be created faster to avoid worsening the unemployment rate.
Arithmetically, a growth rate of at least 7 to 8% is needed to keep the situation under control, which, given the current state of the global and regional economy, is more akin to utopia than to an economic prospect.
The IMF nevertheless recommends continuing to lay the foundations for sustainable growth and job creation, focusing spending on strengthening the economy's production capacity, improving the business climate and finally increasing the resilience of institutions and financial markets.
Posted on June 19, 2009
Africanmanager
Should this new line be attributed to the crisis, so as not to add to the woes of those who suffer it, or to the credit of the IMF's new general management? In any case, the Deputy Director of the Middle East and Central Asia Department, Amor Tahari, while agreeing that this is the case, claimed, without convincing many, that the Fund has, since its creation more than 60 years ago, been dedicated to providing its members with advice and recommendations.
The fact remains that the growth prospects in the MENA countries are clearly less bad than elsewhere, particularly the European Union, insofar as the growth rate in all the countries that make up this group is positive, i.e. above zero, varying between 1.1% and 4.4% for 2009. This is particularly the case in Tunisia, where the expected GDP growth rate this year is 3.3%, rising to 3.8% in 2010, second only to Morocco with 4.4% in 2009 and 2010. In these two countries, this rate could improve thanks to an exceptional harvest this year.
The IMF official, who is in Tunisia heading an IMF delegation for an Article IV mission, refrained from saying more, pending the publication of the mission's conclusions, but it was easy to understand that the forecast rate should be revised slightly upwards, even if Amor Tahari took care to specify that everything will depend on how the recovery plan will ultimately be implemented and its impact on the Tunisian economy.
Nevertheless, the slowdown in growth in non-oil-producing countries, including Tunisia, is due to a decline in exports, tourism revenues, remittances and FDI, while in the case of oil-exporting countries, it is due in particular to the contraction in oil and gas exports.
In this configuration, inflation is the most positive sign, being the lowest in the Maghreb, particularly in Tunisia and Morocco where the cost of oil imports has fallen sharply, as has the budget balance, where deficits are only likely to increase slightly given the limited fiscal space.
Other areas where the Maghreb countries are relatively safe are the evolution of stock market indices, where the fall is less pronounced (-7%) in Tunisia and (-21%) in Morocco, while it reaches -59% in Egypt and -46% in Qatar, in addition to the differences in sovereign rates, which have widened but remain lower in the Maghreb.
However, unemployment is the biggest challenge, as it is expected to worsen. The IMF's recipe is clear: jobs must be created faster to avoid worsening the unemployment rate.
Arithmetically, a growth rate of at least 7 to 8% is needed to keep the situation under control, which, given the current state of the global and regional economy, is more akin to utopia than to an economic prospect.
The IMF nevertheless recommends continuing to lay the foundations for sustainable growth and job creation, focusing spending on strengthening the economy's production capacity, improving the business climate and finally increasing the resilience of institutions and financial markets.
Posted on June 19, 2009
Africanmanager
