IMF chief urges troubled Tunisia to press on with reforms

International Monetary Fund chief, French Christine Lagarde meets with Tunisian Prime Minister Habib Essid (R) on September 8, 2015 in Tunis (AFP Photo/Salah Lahbibi) (AFP)

Tunis (AFP) - IMF chief Christine Lagarde urged Tunisia, whose vital tourism sector has been hard hit this year by deadly Islamist violence, to press ahead with the "vast number" of pending economic reforms.

However, while noting difficult international economic conditions and the negative effects of Islamist attacks on the national museum and a popular tourist resort, she said Tunisia was "proving its resilience."

Lagarde spoke after meeting President Beji Caid Essebsi and Prime Minister Habib Essid.

"We agreed on the need to move forward as quickly as possible on the vast number of reforms still to be executed," the International Monetary Fund director said.

"To maintain growth, create the conditions of prosperity and, above all, create employment, it is imperative to maintain security, macroeconomic and financial stability so that confidence can be restored" among domestic and foreign investors, she said.

She said this requires a solid banking system, as well as an efficient public administration, a fair tax system and a business climate that is open to competition while also providing modern social protections.

She said she was "confident... in Tunisia's ability to meet these challenges."

Since the popular uprising that ousted a longtime dictator in early 2011, Tunisia's economy has struggled to take off.

It was badly shaken in March by an attack on the national museum, followed by one in June in the resort of Sousse, that killed a total of 59 tourists.

GDP grew by a modest 1.0 percent in the first half, but the full-year figure is expected to be only half a percent, the finance ministry has said.

In 2013, the IMF granted Tunisia a $1.7 billion (1.5 billion euro) credit line that was to have expired in June. It was extended for another seven months to give the country more time to adopt the needed reforms.