Tunis/Tunisia — The Executive Board of the Central Bank of Tunisia (BCT), on Wednesday, decided to keep the key interest rate unchanged at 6.25%.
At a periodic meeting held remotely, the BCT board stressed the need to achieve political stability and rapidly contain the pandemic and its economic and social repercussions.
In this connection, the BCT recommended implementing the necessary reforms to support investment in the productive sectors and restore business operators’ confidence in order to accelerate economic recovery.
The BCT board also emphasised the need to reach an agreement on a new structural reform programme that can bring together all national partners in order to send a positive signal to donors and international rating agencies, and to facilitate access to international financial markets, in addition to mobilising external resources.
The meeting also provided an opportunity to discuss the impact of this situation on the recovery of the national economy that saw its growth contracting sharply in 2020 and which has affected both sectors linked to external demand and those oriented towards the domestic market, particularly in a context of regression in the activity of the extractive sectors.
With regard to the evolution of prices, the BCT board noted that the inflation rate in December 2020 was stable at around 4.9% year-on-year for the second consecutive month, compared with 6.1% in the same month last year. The inflation rate therefore stood at 5.6% for the whole of 2020, compared with 6.7% a year earlier.
This downward trend is widely perceptible in inflation "excluding administered and fresh products", which fell from 7.2% in 2019 to 5.6% in 2020, despite a slight increase in December to 5%, from 4.9% the previous month.
With regard to recent developments in the external sector, the board stressed the regression of the current deficit in 2020 to 6.8% of GDP, against 8.4% the previous year.
This result is mainly attributable to the contraction of the trade deficit, in connection with the repercussions of the COVID-19 crisis on Tunisia’s foreign trade.
In fact, imports fell at a faster pace than exports, i.e. -18.7% and -11.7%, compared with an increase of 5.5% and 7%, respectively, a year earlier.
The 8.7% increase in expat remittances also contributed to the consolidation of this positive result of the foreign sector, despite the sharp 64.1% drop in tourism receipts.Taking into account these developments, net foreign exchange reserves reached 22,621 MD or 158 days of imports on January 29, 2021, against 19,403 […]
