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Tunisia's central bank maintained its key interest rates, noting the stabilization of inflation following the easing of some prices of foods and services amid slow economic growth.


The Central Bank of Tunisia (BCT) has kept its rate steady since a 100-basis-point rate hike in February as part of a 350-point tightening cycle that began in April 2017.

Tunisia's headline inflation rate has been decelerating since late 2018 and was steady at 6.7 percent in September and August while core inflation, which excludes food and subsidized goods, fell to 6.9 percent from 7.0 percent in August, the central bank said.


In its statement, the bank's board underlined the slow pace of economic growth and said this would not exceed 1.4 percent for 2019, mainly due to weak exports, business-oriented sectors, and mining.


Tunisia's gross domestic product ticked up to an annual rate of 1.2 percent in the second quarter of this year, up from 1.1 percent in the first quarter but down from 2.9 percent in the second quarter of 2018 and 2.7 percent in the first quarter of last year.


Last month the governor of BCT, Marouane El-Abassi, said he expects inflation to drop to 6.9 percent by the end of the year and then gradually declined to 6.5 percent in 2020 and 5.9 percent in 2021.


Tunisia's inflation rate has been pushed up by automatic adjustments of wages to energy costs and increases in public sector wages, both of which the International Monetary Fund (IMF) has criticized.

 

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