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Tunisia sees budget deficit narrowing to 6 pct/GDP in 2013

Tunisia's Central bank expects narrowing deficit of his country's budget to reach 6 per cent compared to currently 6.6 per cent

Reuters, Saturday 29 Sep 2012
Tunisia
Tunisian protester shouting while hold bread loaf in his hand (Photo: Reuters)
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Tunisia's budget deficit should narrow to 6 per cent next year from 6.6 per cent of GDP expected in 2012, the central bank governor said on Friday, indicating economic recovery in the cradle of Arab Spring revolts may take longer than anticipated.

Chadli Ayari, who took over in July after his predecessor was sacked, also said a 3.5 per cent economic growth in 2013 is achievable while the government bets on 4.5 per cent up from 3.5 per cent it expects this year.

Ayari did make direct references to the government's growth projections, but he went as far as predicting that the local economy, which is heavily anchored to the now-troubled euro zone, may not fully recover in 2014.

"2014 will not be the year of recovery for the Tunisian economy. It is still a year of transition that may see the premise of recovery," Ayari told reporters.

"A 3.5 per cent growth is possible (to achieve) in 2013," he added.

Government statistics show GDP growth stood at 3.5 per cent during the first half of 2012.

The Tunisian economy is gradually recovering from last year's political turmoil but faces problems as a result of the crisis in the euro zone, the main market for its exports and the source of a majority of tourist visitors.

It has however held a steady course on inflation, interest rates and exchange rates even in the turmoil that followed President Zine al-Abidine Ben Ali's ousting in January last year.

But a string of resignations, including that of the finance minister and the central bank governor, appears to indicate that holding that line may not be easy. For years, Tunisia has had the highest GDP per capita in the region and post-revolution expectations from its 10-million population are high.

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