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Algeria Lends $300 Million to Tunisia

A general view shows a empty street in Sidi Bou Said, an attractive tourist destination, amid a coronavirus lockdown, Tunis, Tunisia, April 1, 2020. (Reuters)
A general view shows a empty street in Sidi Bou Said, an attractive tourist destination, amid a coronavirus lockdown, Tunis, Tunisia, April 1, 2020. (Reuters)
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Algeria Lends $300 Million to Tunisia

A general view shows a empty street in Sidi Bou Said, an attractive tourist destination, amid a coronavirus lockdown, Tunis, Tunisia, April 1, 2020. (Reuters)
A general view shows a empty street in Sidi Bou Said, an attractive tourist destination, amid a coronavirus lockdown, Tunis, Tunisia, April 1, 2020. (Reuters)

Tunisia said Tuesday it had received a loan from Algeria, the day before a visit by Algerian President Abdelmadjid Tebboune.

The official journal said that President Kais Saied had signed off a deal reached on December 9 for "a loan worth $300 million", around 266 million euros.

Tunisia's public finances have been battered by a decade of political instability, low investment and structural problems, with debts approaching 100 percent of GDP and unemployment at 18 percent.

Tunisia's economy has grown at just 0.6 percent a year since its 2011 revolution, while inflation has surged at six percent a year.

An unwelcoming business environment has discouraged investors.

The Covid-19 pandemic made the situation in the North African country far worse, slashing jobs in the vital tourism sector, high commodity prices have hurt reserves, and a drought has battered farmers, AFP reported.

Tunis has received economic aid from the European Union and is seeking its fourth aid program in 10 years from the International Monetary Fund, aiming to receive a loan of nearly $4 billion before the end of the year.

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IMF Approves Third Review of Sri Lanka's $2.9 Bln Bailout

Peter Breuer, Senior Mission Chief for Sri Lanka at the IMF along with Katsiaryna Svirydzenka, Deputy Mission Chief for Sri Lanka at the IMF and Martha Tesfaye Woldemichael, Deputy Mission Chief for Sri Lanka at the IMF, attend a press conference organized by the International Monetary Fund (IMF) in Colombo, Sri Lanka, November 23, 2024. REUTERS/Thilina Kaluthotage
Peter Breuer, Senior Mission Chief for Sri Lanka at the IMF along with Katsiaryna Svirydzenka, Deputy Mission Chief for Sri Lanka at the IMF and Martha Tesfaye Woldemichael, Deputy Mission Chief for Sri Lanka at the IMF, attend a press conference organized by the International Monetary Fund (IMF) in Colombo, Sri Lanka, November 23, 2024. REUTERS/Thilina Kaluthotage
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IMF Approves Third Review of Sri Lanka's $2.9 Bln Bailout

Peter Breuer, Senior Mission Chief for Sri Lanka at the IMF along with Katsiaryna Svirydzenka, Deputy Mission Chief for Sri Lanka at the IMF and Martha Tesfaye Woldemichael, Deputy Mission Chief for Sri Lanka at the IMF, attend a press conference organized by the International Monetary Fund (IMF) in Colombo, Sri Lanka, November 23, 2024. REUTERS/Thilina Kaluthotage
Peter Breuer, Senior Mission Chief for Sri Lanka at the IMF along with Katsiaryna Svirydzenka, Deputy Mission Chief for Sri Lanka at the IMF and Martha Tesfaye Woldemichael, Deputy Mission Chief for Sri Lanka at the IMF, attend a press conference organized by the International Monetary Fund (IMF) in Colombo, Sri Lanka, November 23, 2024. REUTERS/Thilina Kaluthotage

The International Monetary Fund (IMF) approved the third review of Sri Lanka's $2.9 billion bailout on Saturday but warned that the economy remains vulnerable.
In a statement, the global lender said it would release about $333 million, bringing total funding to around $1.3 billion, to the crisis-hit South Asian nation. It said signs of an economic recovery were emerging, Reuters reported.
In a note of caution, it said "the critical next steps are to complete the commercial debt restructuring, finalize bilateral agreements with official creditors along the lines of the accord with the Official Creditor Committee and implement the terms of the other agreements. This will help restore Sri Lanka's debt sustainability."
Cash-strapped Sri Lanka plunged into its worst financial crisis in more than seven decades in 2022 with a severe dollar shortage sending inflation soaring to 70%, its currency to record lows and its economy contracting by 7.3% during the worst of the fallout and by 2.3% last year.
"Maintaining macroeconomic stability and restoring debt sustainability are key to securing Sri Lanka's prosperity and require persevering with responsible fiscal policy," the IMF said.
The IMF bailout secured in March last year helped stabilize economic conditions. The rupee has risen 11.3% in recent months and inflation disappeared, with prices falling 0.8% last month.
The island nation's economy is expected to grow 4.4% this year, the first increase in three years, according to the World Bank.
However, Sri Lanka still needs to complete a $12.5 billion debt restructuring with bondholders, which President Anura Kumara Dissanayake aims to finalize in December.
Sri Lanka will enter into individual agreements with bilateral creditors including Japan, China and India needed to complete a $10 billion debt restructuring, Dissanayake said.
He won the presidency in September, and his leftist coalition won a record 159 seats in the 225-member parliament in a general election last week.