finance & economy

SFL 2020: Growth rate for 2020 expected to be -7.3%

October 22, 2020

TAP)-The growth rate for the whole of 2020 is expected to stand at -7.3%, according to the draft Supplementary Finance Law (SFL 2020), compared to a forecast of 2.7% in the initial Finance Law (FL 2020). Minister of Economy, Finance and Support to Investment Ali Kooli indicated in an interview given to TAP, that for 2020, 'we predicted a 3% growth, but we have ended up with a decline of around -8%, a difference of 11 points, inducing nearly 8 billion dinars less budget revenues.'

The IMF projected, in its latest report on the outlook for the world economy, published on October 13, 2020, a contraction of 7% in the growth rate of the Tunisian economy in 2020. The IMF assumed a rebound of 4% in 2021 and 3% in 2025.

The World Bank, for its part, estimated that the Tunisian economy should experience a slowdown of -9.2% in 2020, down from the initial forecast of -4%, due to the Covid-19 pandemic.

The Tunisian growth dropped to -21.6% during the second quarter of 2020, and to -11.9% during the first half of the year.

According to the SFL, the volume of public debt will reach, at the end of 2020, 90% of GDP (the equivalent of 100 billion dinars), whereas it was foreseen in the 2020 FL that it would reach 72.5%.

The foreign public debt accounts for 63.6% of the total of this debt and the domestic debt, 36.4%.

The budget expenditure for the whole year will amount to 43.7 billion dinars, with a wage bill of 19.2 billion dinars, intervention expenditure is around 13 billion dinars, and financial expenditure is 4.3 billion dinars.

Investment expenditure will not exceed 3.8 billion dinars, or just 8.7% of overall expenditure.

A negative development of imports is also expected for the whole year 2020, of -19.8% against 9% foreseen in the FL.

Besides, the draft FL also indicated that Tunisia will receive, for the whole year 2020, grants exceeding 1 billion dinars, against 0.2 billion dinars in 2019.

These donations will be offered by the European Union ( €290 million), the World Health Organisation ($30 million) and the Kuwaiti Fund for Arab Economic Development (1 million Kuwaiti dinars).

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