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31-05-12

Tunisia negotiating USD750m loan from Saudi Arabia: Minister

(MENAFN) Tunisian Finance Minister Houcine Dimassi said that his country is in talks with Saudi Arabia over a USD750 million loan, ruling out any plans to ask for organizations' assistance at the moment, Arabian Business reported. In April, Qatar awarded Tunisia a USD1 billion low interest loan, half of which is at an annual interest rate of 2.5 percent and will go to the central bank. Dimassi said that the loan will help Tunisia tackle its fiscal deficit, estimated this year at 6.6 percent of gross domestic product. The country's economy grew 4.8 percent in the first quarter of the year compared to the same period in 2011, he added. Tunisia is likely to issue USD300 million in bonds guaranteed by the US government in July, though the date may change, Dimassi said. The issuance comes in the wake of an accord in Washington in April, where the US government agreed to provide a loan guarantee to enable the Tunisian government to access market financing, reducing the Tunisian government's borrowing costs at a time when market access has become more expensive for many emerging market countries. Dimassi expected Tunisia's economy to grow by 3.5 percent in 2012, more optimistic than the IMF, which predicted the North African economy to grow 2.2 percent. Previously this month, Standard & Poor's revised Tunisia's sovereign credit rating to junk, downgrading it to BB, on weaker-than-expected economic, fiscal and external debt indicators despite overall political stability.

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