Press release from the Executive Board of the BCT of 6 OCTOBER 2021 Read more

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Press release from the Executive Board of the BCT of 6 OCTOBER 2021

The Management Board of the Central Bank of Tunisia held its periodic meeting on Wednesday, October 6, 2021 and discussed the various issues on its agenda. At the start of his work, he reviewed recent economic, monetary and financial developments, including data on economic activity. Indeed, the GDP posted in the second quarter of 2021 an increase of 16.2% compared to the same period of last year and a decrease of 2% compared to the previous quarter, mainly due to the effect base induced by the contraction of the economy. activity during the same period of the previous year. These results also underline the relative recovery of certain sectors, in particular exporting manufacturing industries, in relation to the continued improvement in demand from the Euro zone, in addition to the significant recovery in fuel production thanks to the contribution of “Nawara” and “Halk El Menzel” and the gradual restoration of the phosphate industry. On the other hand, certain sectors continue to be affected by the health crisis of COVID-19, in particular that of services.

As for the evolution of prices, the Council noted a stabilization of the inflation rate in September 2021 at around 6.2%, year on year, for the second consecutive month, against 5.4% in the same month. of the previous year. The main core inflation indicators also increased slightly to reach + 6% against + 5.9% the previous month for “inflation excluding food and energy” and + 5.4% against + 5.3% for “inflation excluding controlled products and costs”.

Regarding recent developments in the external sector, the Council underlined the decrease in the current account deficit during the first eight months of 2021, to 3.5% of GDP against 4.8% a year earlier. This result is mainly explained by the continued consolidation of labor income (+ 42.8%) with a relative improvement in tourism receipts (+ 5.2%), while the trade deficit (FOB-CIF) s’ is widened by 13.7% in line with the evolution of imports. . As for the net flows of external capital, they recorded a sharp drop due to the drop in the volume of external resources mobilized, in addition to the increase in expenditure on the repayment of the principal of the debt. In view of these developments, net foreign currency assets fell to 20,962 MTD, i.e. 127 days of importation at the end of September 2021 against 23,099 MTD and 162 days of importation at the end of 2020.

In this context, the Council expressed its concern at the acute drying up of external financial resources, faced with the significant closure needs of the State Budget for the year 2021, reflecting the fears of international donors in the face of the deterioration of the sovereign rating of Tunisia. Added to this is the absence of a new program with the IMF, which will require an intensification of bilateral financial cooperation by the end of the year in order to mobilize a maximum of external resources and avoid monetary financing. during this period because it involves repercussions on the level of inflation as well as on foreign currency reserves and management of the dinar exchange rate upward trend in commodity prices on international markets following its negative impact on Tunisia’s relations with international donors and sovereign rating agencies.

On the other hand, the Council underlined that the deterioration of public finances, suffering from a situation of vulnerability, as well as the rise in international oil prices, are likely to slow down the sustainability of the public debt, in addition to the negative effects. the increase in public debt the sector’s indebtedness to the banking system on its ability to finance economic operators. He added that the persistence of this situation will have strong negative repercussions on the external balances and on the foreign exchange market.

After discussions and deliberations on the aforementioned issues, the Council reiterated its deep concern over the current critical financial situation, stressing the need to send clear signals to local and foreign investors regarding the resumption of economic activity and global and financial balances, consolidation of public sector governance, improvement of the business climate and intensification of investment efforts. In this regard, the Council affirmed that the Central Bank will continue to play fully its role of supporting the economy and closely monitor the development of economic, monetary and financial indicators. At the end of its work, the Board decided to keep the key rate of the Central Bank of Tunisia unchanged.


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