Press release of the BCT Executive Board meeting held on 27 December 2019

The BCT Executive Board held its periodic meeting on 27 December 2019. In the beginning of its works , the Board examined the latest trends in the economic, monetary and financial situation. It expressed its satisfaction with respect to the ongoing improvement of the main monetary and financial indicators, which can by no means hide the weak economic performance, with a growth rate of just 1.1% over the first nine months of the current year, in line with the industrial sector’s activity decline, mainly because of shrinking external demand and the lower national production of fuel.

As for trends in prices, the Board noticed that the inflation rate decreased to about 6.3% in annual shift, over November 2019, against 7.4% over the same month of the previous year. This evolution is attributable to the slight easing of the prices of foodstuff, manufactured products of services. Likewise, the core inflation (excluding controlled and fresh products) continued to move downward, reaching 6.5% against 6.8% in October 2019.

Concerning the external sector, the Board noted the drop of the current deficit to about 7.9% of GDP, over the first eleven months of the current year, against 9.9% over the same period of the previous year, thanks to firmed up tourist receipts and worker remittances, as well as the deceleration of the trade deficit’s deterioration.

On the other hand, net assets in foreign currency firmed up to 18.948 MD or 107 days of import as of 26 December of the current year, against 13.974 MD or 84 days at the end of 2018. The dinar’s foreign exchange rate continued to appreciate against main foreign currencies.

Following deliberations and discussions on the above-mentioned issues, the Board emphasized again that the progressive improvement of the main monetary and financial indicators remains vulnerable and should be backed up by a higher growth pace through relevant parties’ concerted efforts to resume the output capacities, boost investment efforts and incite export, in addition to acceleration of the pace of reforms which aim at consolidating economic performance, improving the business climate and guaranteeing the sustainability of global financial balances.

Hence, The Executive Board decided to keep unchanged the key interest rate of the Central Bank of Tunisia.