Strategy Note /

TUNISIA: Too divided to reform, external vulnerability masked by IMF loan

    Hasnain Malik
    Hasnain Malik

    Strategy & Head of Equity Research

    Tellimer Research
    31 May 2018
    Published byTellimer Research
    Deep divisions in Tunisian politics inhibit the establishment of sufficient consensus to enact the economic reforms. These reforms are necessary for high growth on a sustainable fiscal and external account footing. In our view, these divisions may not be severe enough to derail meeting the inflation control and fiscal consolidation conditions of the IMF loan (a 4-year Extended Fund Facility of cUS$2.9bn approved in May 2016), but they will lead to delays in required reforms and keep growth sub-optimal. As a result, we are particularly cautious on Tunisian equities.