Summary:

On 5 January 2024, the International Monetary Fund (IMF) released a list of 12 countries, including Tunisia, with prolonged delays in completing their Article IV consultations. 

Under the IMF’s Articles of Agreement, Article IV stipulates a yearly IMF staff visit to collect economic and financial information and discuss the country’s economic policies and future with officials. According to the IMF, Tunisia’s most recent Article IV consultation was completed in early 2021. 

Tunisia is one of 12 countries identified by the IMF. The others include Venezuela, Syria, Yemen, Iran, Belarus, Eritrea, Burkina Faso, Chad, Haiti, Myanmar and Russia. 

During IMF and World Bank meetings in October 2023, the IMF announced plans to send a staff delegation to Tunisia in December 2023. However, shortly after those meetings, the Minister of Economy and Planning was fired. The announcement of the delayed IMF visit came shortly after his firing. 

In late 2022, a $1.9 billion loan deal was reached by Tunisia and the IMF. However, throughout 2023, Tunisian leaders delayed the final steps of implementation and expressed concern about the required reforms linked to the deal. 

Outlook: 

President Kais Saied’s administration has clearly expressed concern about the nature of the reforms stipulated by the IMF, distancing the 2024 policy agenda from the $1.9 billion loan deal.  

While this effort has appeased Tunisia’s powerful labor unions who are among the most vocal opponents to economic reform, it has made the external funding environment increasingly challenging. Many potential sources of external financing have tied future loans to Tunisia’s securing of an IMF loan, essentially linking additional financing to economic reform. 

Inclusion on the list of countries with delayed IMF consultations will further degrade Tunisia’s perceived creditworthiness and cause strategic reputational damage at a vulnerable economic moment.

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