Tunisia’s investment and international cooperation minister said on Thursday he expected the US government to guarantee around a fifth of the $2.5 billion the North African state will need to borrow next year.
Reuters quoted Riadh Bettaib as saying that Washington has pledged to guarantee a loan worth more than $500 million in order to “help us tap international debt markets at a low interest rate in the limits of 1.68%”.
The minister did not explicitly say if that meant Tunisia would use the guarantee as it did in July when it raised $485 million from an international bond issue.
The issue, its first since 2007, aimed to help democratic transition and economic recovery after a revolt ousted longtime President Zine al-Abidine Ben Ali from power last year.
Tunisia’s public debt has risen to 51% of GDP by the end of 2011, from 48% a year earlier, and the International Monetary Fund (IMF) expects it to increase to close to 56% of GDP by the end of next year.
The government plans to borrow 4.3 billion dinars ($2.73 billion) in 2012. It forecasts economic growth of 3.5%, after a 1.8% contraction last year.
The IMF report said last month that Tunisia’s weak economy is having a severe impact on the country’s financial wellbeing. It urged the central bank to implement reforms targeting the country’s failing banking sector in a bid to increase loan provisions and kickstart the economy.
The Paris-based monetary agency also urged the central bank regulators to develop crisis-management arrangements for struggling banks and review its exposure to these organisations by winding back its liquidity support.