July 6, 2018 / 11:01 PM / in 11 days

UPDATE 1-IMF disburses $250 mln loan tranche to Tunisia

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By Tarek Amara

TUNIS, July 6 (Reuters) - The International Monetary Fund on Friday approved the payment of a $250 million tranche, the fourth from Tunisia’s loan programme tied to economic reforms aimed at keeping its deficit under control, the fund said.

The tranche brings disbursements so far under the four-year programme to $1.139 billion, the fund said in statement.

The programme agreement reached in 2016 is worth about $2.8 billion.

Tunisia has been praised as the only democratic success among the nations where “Arab Spring” revolts took place in 2011. But successive governments have failed to trim its fiscal deficit and create economic growth.

Tunisia’s central bank last month raised its key interest rate by 100 basis points to 6.75 percent, the second hike in three months, to tackle inflation that has reached the highest level since 1990.

The IMF said in May that anchoring inflation expectations through additional rate increases would be crucial if price pressures did not moderate quickly.

Inflation is expected to reach to about 9 percent for the first time by the end of this year, officials have said.

The government forecasts the budget deficit to fall to 4.9 percent of gross domestic product in 2018 from about an estimated 6 percent in 2017. It aims to raise GDP growth to about 3 percent next year from 2.3 percent last year. (Reporting by Tarek Amara; Editing by Richard Chang)

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