Press Release of the BCT Executive Board meeting held on 29 December 2014

In the beginning of its works, the Board reviewed the latest trends in the international economic situation, pointing out the pursuit of a flat world economy which meant a drop in world commodities prices, notably the energy prices decline. On the other hand, the American economy indicators continued to improve, which had a positive impact on trends in the dollar’s value compared to the other foreign currencies as well as on the main international stock exchange markets which went upwards.
On the national level, the Board noted that the economic growth rate stood at a relatively weak level over the third quarter of 2014: 2.3% in annual shift, a rate very close to the one recorded in the previous quarter (2.2%), in line mainly with the non-manufacturing industries production shrinking and the lower growth pace in the market services sector.
In considering recent available sector-related data, the Board underlined an increase in the industrial production general index over the first nine months of 2014, while exports of main industrial exporting sectors continued to progress over the first eleven months of the year, as well as imports of raw materials, semi-finished products and capital goods. This augurs for a better economic growth outlook over the forthcoming period. However, the Board drew attention to the ongoing fall in the services sector’s activity indicators at the end of November 2014, notably tourism and air transport.
As for the external sector, the Board focused, once again, on the persisting pressure of the current deficit widening, up to 6,832 MTD, or 8.3% of GDP over the first eleven months of 2014, against 7.1% over the same period of the previous year. This trend is mainly attributable to the trade deficit worsening which exceeded 12.5 billion dinars, due to the continuous growth of the energy balance and the food balance deficits.
Despite these trends, the indicator related to net assets in foreign currency remained positive, posting 13,014 MTD or 112 days of imports, as of 29 December 2014, against 107 days on the same date of the previous year, thanks mainly to the sustained increase in net foreign capital inflows which went beyond 8,200 MTD.
As for trends in prices, the Board noticed an ongoing positive trend of this index for the fourth month in a row. This brought the inflation rate to 5.2% in annual shift over November 2014, against 5.4% in the previous month and 5.8% a year earlier, in line with the drop, though relatively, in the foodstuff prices growth pace.
Concerning the banking sector activity, the Board highlighted a certain improvement of the deposits pace over the first eleven months of the current year (7.3% vs. 6% over the same period of 2013), following mainly the increase in sight deposits. This is the same for financing of the economy which posted the same trend over the same period (7.7% vs. 5.9%), in line notably with recovery of short and medium term loans.
On the monetary level, the Board noted an improvement of banking liquidity over December of the current year. As a consequence, monetary policy operations went down sharply over December, to 3,322 MTD, as of 29 December, against 4,580 MTD on daily average in last November. In fact, the money market average interest rate went down to 4.75% on the same day, against 4.93% recorded over last October and November.
At the foreign exchange markets level, the dinar depreciated by 1.1% against the dollar, and appreciated by the same rate against the euro, as of 26 December of the current year and compared to the previous month, posting 1.8628 dinar and 2.2709 dinars respectively. In comparison with the end of the previous year, the dinar’s exchange rate stabilized against the euro and depreciated by 11.5% against the dollar.
In light of all these trends, the Board decided to keep unchanged the Central Bank key interest rate.
This notwithstanding, the Board highlighted the political situation easing, following the successful completion of the democratic transition. This entails, in itself, reassuring messages for actors and investors both inside and outside the country, and augurs well for a positive outlook at the economic level. To this respect, it insisted on the need, for everyone, to be fully involved in the best exploitation of this favourable climate so as to give impetus to economic activity and speed up the pace of the reforms needed to lay the foundations of the required economic growth and financial stability.

(For further data on the economic and financial situation, please refer to the Central Bank of Tunisia web site: