Tunisia secured a $743 million loan from the International Monetary Fund (IMF) on Friday to help counter the economic effects of the coronavirus, the IMF said through a statement.
According to the statement, Tunisia’s economy is expected to contract by 4.3% in 2020 under the weight of the COVID-19 pandemic, the deepest recession since its independence in 1956.
The IMF said that the financing will support the authorities’ emergency measures to contain the spread of the virus and mitigate its human, social, and economic toll amid unprecedented uncertainty.
These measures involve raising health spending, strengthening social safety nets, and supporting small- and medium-sized firms hit by the crisis. The IMF financing will also ensure an adequate level of international reserves and catalyze additional donor financing.
“The COVID-19 pandemic has hit Tunisia hard. The pandemic will worsen Tunisia’s already elevated macroeconomic imbalances and will also create urgent fiscal and balance of payment needs. The economy is expected to contract by 4.3 percent in 2020,” Mitsuhiro Furusawa, Deputy Managing Director and Chair said.
“The authorities are taking emergency measures with a focus on the health sector, the social safety net, and firms that come under stress,” he added.
Tunisia has confirmed 643 cases of the virus and 25 deaths. The infection is hammering its vital tourism sector which represents nearly 10% of gross domestic product.
Tunisia has also received 250 million euros ($272 million) of financial aid from the European Union