UPDATE 1-Tunisia expects $750 mln in World Bank, IMF loans soon, plans sukuk issue
(Adds details throughout from minister)
TUNIS Oct 28 (Reuters) - Tunisia expects $750 million in loans from the World Bank and International Monetary Fund by the end of 2013 to prop up its fragile public finances and plans an Islamic bond issue early next year, it said on Monday.
Finance Minister Elyess Fakhfakh told reporters that the economy grew by 3 percent in the first nine months of this year from a year earlier and the government now expected a budget deficit of 6.8 percent of GDP for 2013, smaller than its previous forecast of 7.4 percent.
Nearly three years after its "Arab Spring" uprising, Tunisia's ruling Islamists and opposition on Friday began talks to end months of political deadlock that has weakened the country's economic outlook.
The government led by ruling moderate Islamist party, Ennahda, has agreed to step down in three weeks and make way for a caretaker government which will govern until elections next year that aim to put the country's transition to full democracy on track.
Tunisia saw the first of the Middle East revolts of 2011 when it overthrew long-time autocratic leader Zine al-Abidine Ben Ali.
Fakhfakh said the IMF would disperse $500 million next month from a previously agreed $1.7 billion loan, and the World Bank would pay $250 million by the end of the year. The government had previously said it would get $500 million from the World Bank this year.
Fakhfakh said the European Union had also agreed to a 300 million euro credit for next year.
But the minister said the African Development Bank or AFDB had cancelled a loan for 500 million dinars or around $300 million because of instability in Tunisia.
To cover part of its financing needs, Tunisia planned to issue a sukuk or Islamic bond for 1 billion dinars or around $600 million in February or March next year, Fakhfakh said.
Tunisia's economy grew 3.6 percent in 2012 and the government had forecast 3 percent growth this year. (Reporting by Tarek Amara; Writing by Patrick Markey; Editing by Susan Fenton)
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