Tunisia will need $4 billion in loans this year

On The Wires: Tunisia's budget deficit is expected to hit 5 per cent this year as the country picks itself up after revolution.

TUNIS // Tunisia's economic growth will be zero to 1 per cent this year and the country will need loans of $4 billion (Dh14.69bn), Finance Minister Jalloul Ayed told reporters today in the capital, Tunis.

The budget deficit will reach 5 per cent this year, up from the 2.5 per cent the government had forecast, he said. Tunisia's external debt reached 16 billion dinars ($12 billion), the minister said.

Foreign investment is expected to decrease by 1 billion dinars this year, he said.

Tunisia's caretaker government is trying to bring stability to the North African country, where protests over unemployment, high food prices and political repression forced President Zine El Abidine Ben Ali from power on January 14.

Tunisia's long-term foreign-currency sovereign credit rating was cut one notch on March 16 to BBB- at Standard & Poor's, which said the country's political turmoil this year has hurt its economic prospects.

"The Tunisian economy is going through a very critical situation," Ayed said. Sectors that were hit by the turmoil in Tunisia this year include tourism, transportation and trade, he said.

The country won't ask for the restructuring of its foreign debt, to avoid the risk of foreign intervention in its political decisions, the minister said.

*Bloomberg