Mubasher: The International Monetary Fund (IMF) said that economic growth in Tunisia is picking up, but risks to macroeconomic stability have also risen.

The strong policy and reform implementation will lower risks to the budget and decelerate inflation, a reported issued by the IMF on Friday indicated.

“Opposite trends continue to characterize the Tunisian economy in early 2018. Economic growth is picking up, led by a good agriculture season, increases in investment and an early recovery in exports.”

“On the other hand, risks to macroeconomic stability have risen: inflation has risen rapidly to 7.6% in March, international reserves remain below 90 days of import cover, and public and external debt have reached 71 and 80% of GDP, respectively,” added the report.

The international institution also noted that addressing economic imbalances is critical to keep the recovery on-track and strengthen the foundations for fair and equitable economic growth in the future.

“Containing debt today will help prevent increasing taxes tomorrow,” the report stated.

The IMF team also agrees with the Central Bank of Tunisia (BCT) that anchoring inflation expectations through additional increases in the policy interest rate will be crucial if inflation does not come down quickly.

“Lowering inflation will protect the poor, maintain the purchasing power of the Tunisian people, and stabilize the macroeconomic outlook,” the report explained, adding that a more flexible exchange rate will help rebuild international reserves and continue to encourage exports.