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Japan agrees to grant Tunisia $600 mln loan guarantee

Reuters Translate This Article
20 October 2012

Tunis (Reuters) - Japan will provide a $600 mln 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 2102,' 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 percent.

The economy shrank 1.8 percent 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 percent next year from 6.6 percent 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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