Japan agrees to grant Tunisia $600 mln loan guarantee
Reuters, Saturday 20 Oct 2012
Tunisia got the Japanese approval for a $600 millon as a loan guarantee and expecting US to guarantee around a fifth of the $2.2 billion to $2.5 billion the north African state will need to borrow next year


Japan will provide a $600 million of loan guarantee to support Tunisia's democratic transition and economic recovery, the Tunisian central bank governor said on Friday.

Chedli Ayari said that Tunisia got approval after his visit to Japan during the meetings of the International Monetary Fund this month.

"The Japanese government granted Tunisia his approval to enable them to issue a loan on the international financial market worth $600 million before the end of the year 2012," Chadli Ayari said without giving more details.

Tunisia also expects the U.S. government to guarantee around a fifth of the $2.2 billion to $2.5 billion the north African state will need to borrow next year, the investment and international cooperation minister told Reuters last month.

The government plans to borrow 4.3 billion dinars in 2012. It forecasts economic growth of 3.5 per cent.

The economy shrank 1.8 per cent in 2011 when the popular revolution which ousted President Zine El Abidine Ben Ali closed factories and deterred tourists and investors.

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.

The International Monetary Fund said at the start of August that Tunisia's medium-term growth prospects are favourable but maintaining economic stability is essential as the country tries to emerge from last year's political upheaval.

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 last month, indicating economic recovery in the cradle of Arab Spring revolts may take longer than anticipated.

A moderate Islamist party won elections held soon after the revolution and now leads a coalition government. The party's leaders have sought to reassure investors and tourists but successive protests and strikes organized by left-wing secular opponents have undermined efforts to boost the economy.

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