Economy
EU considering major Tunisia aid package as migration surges
The European Union said on Sunday it may loan Tunisia over 1 billion euros ($1.07 billion) to help develop its battered economy, rescue state finances and deal with a migration crisis, with most of the funds contingent on it agreeing to painful economic reforms.
The offer was announced by European Commission President Ursula von der Leyen during a visit to Tunisia along with Dutch Prime Minister Mark Rutte and Italian Prime Minister Giorgia Meloni, who are anxious about migration across the Mediterranean.
Their effort, spurred by increasing concerns in Europe about Tunisia’s economic stability, is part of a last-ditch push by major donors to persuade President Kais Saied to agree to the terms of a $1.9 billion International Monetary Fund (IMF) bailout.
Saied has so far rejected the proposals, originally made by his own government, to cut subsidies and restructure loss-making state-owned companies, saying this risks a social explosion.
Donors say time is almost up for Tunisia to agree to the loan and avert a collapse in its state finances, but they are unwilling to lend it money without the reassurance of fully costed reforms that could allow it to repay its debts.
A factsheet released by the EU said the body would lend Tunisia up to 900 million euros to help its macro-finances once it finalised the IMF programme, for which a preliminary agreement was reached in October.
The EU could also provide 150 million euros in budget support this year “in the context of a reform agenda”, the factsheet said.
Von der Leyen added that the EU would also this year provide Tunisia with 100 million euros for border management, search and rescue, anti-smuggling operations and returns “rooted in respect for human rights”.
Meloni, who also visited Tunisia last week, has pressed for the IMF to relax conditions for its loan programme.
She said on Sunday there was “an important window of opportunity” to finalise the aid agreement before the European Council at the end of June.
Von der Leyen also laid out a series of longer-term European efforts to help Tunisia’s economy including ongoing projects for a 150 million-euro digital cable link to Europe and a 300 million-euro renewable energy power export project.
She said the EU would also expand opportunities for young Tunisians to study, work and train in the EU to help them develop skills that could be used to boost the Tunisian economy.
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
© Reuters. FILE PHOTO: Workers walk past an under-construction area with completed office towers in the background, in Shenzhen’s Qianhai new district, Guangdong province, China August 25, 2023. REUTERS/David Kirton/File Photo
SHANGHAI (Reuters) – China’s top planning body said on Saturday it had identified a second batch of public investment projects, including flood control and disaster relief programmes, under a bond issuance and investment plan announced in October to boost the economy.
With the latest tranche, China has now earmarked more than 800 billion yuan of its 1 trillion yuan ($140 billion) in additional government bond issuance in the fourth quarter, as it focuses on fiscal steps to shore up the flagging economy.
The National Development and Reform Commission (NDRC) said in a statement on Saturday it had identified 9,600 projects with planned investment of more than 560 billion yuan.
China’s economy, the world’s second largest, is struggling to regain its footing post-COVID-19 as policymakers grapple with tepid consumer demand, weak exports, falling foreign investment and a deepening real estate crisis.
The 1 trillion yuan in additional bond issuance will widen China’s 2023 budget deficit ratio to around 3.8 percent from 3 percent, the state-run Xinhua news agency has said.
“Construction of the projects will improve China’s flood control system, emergency response mechanism and disaster relief capabilities, and better protect people’s lives and property, so it is very significant,” the NDRC said.
The agency said it will coordinate with other government bodies to make sure that funds are allocated speedily for investment and that high standards of quality are maintained in project construction.
($1 = 7.1315 renminbi)
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
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