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Tunisia Witnesses 31% Drop in Foreign Investments

Tunisia Witnesses 31% Drop in Foreign Investments

Thursday, 13 May, 2021 - 07:15
Foreign investment in the Tunisian industrial sector decreased by 27.3 percent at the end of March (Reuters)

The Foreign Investment Promotion Agency (FIPA-Tunisia) has revealed a 31 percent drop in foreign investments during the first quarter of 2021 compared to the same period last year.

FIPA said the coronavirus pandemic played a negative role in attracting foreign investments in most sectors.

It said investments declined from TND2.5 billion ($919 million) in 2019 to TND1.8 billion ($662 million) last year.

They reached TND344.6 million ($127 million) during March compared to TND503.6 million ($185 million) during the same period in 2020.

Official figures revealed that investment increased by 17.5 percent in 2021, exceeding TND17 billion ($6.25 billion), which is 14 percent of the GDP.

Meanwhile, announced investments in the Tunisian industrial sector declined by 27.3 percent by the end of March.

Industry and Innovation Promotion Agency (Agence de promotion de l'industrie et de l'innovation) reported that investment remarkably dropped in industries of construction materials, leathers, shoes, and mechanical and electrical industries.

In a related context, Standard & Poor’s (S&P) Global warned on Tuesday that a sovereign debt default in Tunisia could cost the country’s banks up to $7.9 billion, accounting for 102 percent of total equity.

Tunisia’s economy has already been hit by the pandemic, with GDP contracting by 8.8 percent last year, according to the International Monetary Fund (IMF).

Mohamed Damak, an analyst at S&P, said that sovereign debt default will cost banks 102 percent of Its equity.

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