Tunisia revolution hits economy

Reuters, Friday 21 Jan 2011

The International Monetary Fund (IMF) expects a decline of 4.5 per cent in the Tunisian economic activity due to the recent political turmoil

Tunisian riots
Political instability expected to cause a down turn in the economy by 4.5 per cent. (photo: Reuters)

Economic activity in Tunisia has been hit by recent political turmoil but it is hard to know exactly by how much without a proper assessment, an IMF spokesman said on Thursday.

Tunisia's 23-year ruler Zine al-Abidine Ben Ali was ousted during a wave of protests over poverty, unemployment and repression, forcing him to flee to Saudi Arabia.

The country is currently under a caretaker government, although protests have kept up pressure for a government free of ties with Ben Ali and the old guard.

IMF spokesman David Hawley told a regular news briefing it was still too early for a firm assessment of the economic impact from the current unrest.

"But it is clear that it has led to a decline in economic activity," Hawley said, quoting a Tunisian minister saying the decline could be the equivalent of 4.5 per cent of gross domestic product.

Hawley said economic pressure was building in the region, with chronically high unemployment a major challenge.

"While the region's oil-importing countries have only seen a relatively mild slowdown of growth last year, to the equivalent of 4.5 per cent, this growth rate is below the level required to create sufficient jobs to absorb new entrants to the labor market," he said.

He said addressing high unemployment in the region was a long-standing but increasingly urgent economic challenge.

The IMF does not have a loan program in Tunisia.

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