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Tunisia's tourism sector could lose $1.4 billion in revenues due to coronavirus

Coronavirus infections in Tunisia have totalled 747 as of Wednesday [Anadolu Agency]

Date of publication: 15 April, 2020

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Tunisia's second-best sector will be ravaged by the coronavirus pandemic, slashing $1.4 billion in revenues and 400,000 jobs.
Tunisia's vital tourism sector will be hard-hit by the coronavirus pandemic, losing $1.4 billion in potential revenues, a report said.

It comes as the North African country scrambles to secure a loan for bonds it plans to issue this year, with the battered tourism industry a vital sector of Tunisia's economy.

Reuters has reviewed a letter forwarded from Tunisian officials to the International Monetary Fund (IMF) which warns the country's economy will shrink by up to 4.3 percent due to the impact of the coronavirus.

The drop would be the steepest in Tunisia's history since it gained independence in 1956, according to the agency.

The report said 400,000 people employed in the sector could lose their job due to the virus outbreak – which has prompted a lockdown in Tunisia.

The measures, enacted last month, has seen the closure of restaurants and hotels and a ban of international flights.

"We are working with partner governments on a potential guarantee for future sovereign bond issuances in the current difficult international context," Reuters quoted the central bank governor and finance minister as saying in the letter.

The IMF has approved a $745 million loan to Tunisia to help the North African country grapple with the economic cost of the coronavirus pandemic.

But Reuters reported that the new funding programme would only start in the second half of this year, while the size of the loan remains unknown.

The IMF has reportedly raised its expectations that Tunisia's 2020 fiscal deficit to 4.3 percent of GDP – compared to the initial estimation of 2.8 percent – due to the pandemic.

Tunisia has recorded a total of 747 coronavirus cases and 34 deaths as a result of infection. So far, 43 have recovered from infection.

As part of its 2020 budget, the news agency reported that Tunisia plans to issue bonds worth up to 800 million euros ($877 million), but said officials have not yet disclosed the specifics.

The tourism industry is the second largest contributor to the country's economy after agriculture.

Read also: Hundreds of Tunisians protest coronavirus lockdown, demanding government support

While previous figures indicated tourism contributing to 8 percent of the country's GDP, reports suggest the rate has increased further due to the economic hit on other sectors.

Despite risks of political uncertainty in Tunisia and violent episodes since the revolution broke out in 2010, investors view the country as a relatively low-risk business environment.

Following a 2015 terrorist attack that killed 38 tourists – most of them British - Tunisia's tourist trade made a slow recovery, recording a total of $2 billion in revenues in 2019, according to official figures.

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