The International Monetary Fund (IMF) has urged Tunisia to offer new conditions for its overdue $1.9 billion loan, emphasizing the urgency of subsidy reform. This call was made by Jihad Azour, director of the IMF Middle East and Central Asia, during the annual IMF-World Bank meetings in Morocco on Thursday.
Azour stressed the need for Tunisia to address fuel subsidies that he said disproportionately benefit wealthy Tunisians, especially in the context of high oil prices. He suggested that such reforms could redirect resources towards promoting financial inclusion and social stability within the North African nation.
In addition to these comments, Azour also revealed plans for an upcoming IMF mission to Tunisia. The objective of this mission is to evaluate recent economic advancements in the country. However, no specific dates for this mission were provided.
In a separate event on Thursday, Azour disclosed that an IMF team will soon examine Tunisia's economic trajectory under Article IV. This announcement was made during a press conference launching the "Building Resilience and Fostering Sustainable Growth" report, part of the IMF's October 2023 Regional Economic Outlook.
While praising Tunisia's reform initiatives, Azour highlighted the necessity for more robust monetary policies to curb high inflation. He also noted that several Middle Eastern and Central Asian economies are experiencing growth deceleration due to stringent policies, decreased oil production, geopolitical tensions, and domestic issues.
The IMF has revised its 2023 real GDP growth forecast for the Middle East and North Africa downwards to 2.0%. It anticipates a potential increase to 3.4% in 2024 as some challenges ease off. However, Azour expressed concern that this growth rate may not provide sufficient job opportunities for the estimated 100 million Arab youth expected to enter the workforce in the next decade.
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