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					  Letter of introduction to the 51st Annual Report


       in 2009 of the Central Bank of Tunisia


                      presented to


His Excellency the President of the Republic of Tunisia




        on behalf of the Board of Directors of the
                Central Bank of Tunisia




                           by


                  Taoufik BACCAR

                       Governor
    Mr. President of the Republic,
    I have the honour of presenting to you the 51st annual
report of the Central Bank of Tunisia, which analyses the main
economic and financial developments in 2009 on both the
international and national scenes. The Bank’s results for the
year are also included.
    Mr. President,
    2009 was marked by growing pressure created by the
international crisis that affected the world economy. Thus, there
was a considerable drop in growth worldwide.
    Governments and monetary authorities in the main
industrialised countries took steps based on wide-ranging
financial bail-out and economic recovery programmes, which
already by the end of 2009 had reduced pressure on the
financial system and boosted economic activity and financial
markets somewhat. But the cost of these efforts weighed
heavily on public finances, especially in European countries.
Many of these countries took drastic measures to contain the
budget deficit and public indebtedness, which could in the short
term endanger the fragile recovery barely under way in the
region’s economy.
    Domestically, despite recession in the economies of
European Union countries, fallout from the world financial crisis
on Tunisia’s economy was limited to only certain export sectors
and services, while the banking and financial sector pursued
growth at a steady pace, maintaining for the most part good
performance.
    In effect, the resilience of Tunisia’s economy over the past
two decades and ongoing implementation of structural
reforms (notably keeping indebtedness down and
improving financial soundness at the banking sector)
allowed room for action to limit the effects of the crisis by
timely implementation of appropriate measures to boost the
                             II
economy and help companies overcome its impact. Thus, the
results of these efforts were satisfactory, especially in terms of
growth and maintaining financial balances, both domestic and
external.
    Mr. President,
     In the closing months of 2008, industrialised countries
entered a period of recession, with 2009 GDP posting a drop of
3.2% after an increase of just 0.5% in 2008, as the financial
crisis spread to the real economy, affecting export of goods and
services, corporate investment, and household consumption.
     Similarly, emerging and developing countries were affected
by the world financial crisis, notably lower external demand,
falling prices for exported commodities, and a drop in foreign
investment, leading to a decrease in economic growth to an
average of 2.5% in 2009, vs. 6.1% a year earlier. China was
among the very few countries to post high growth (9.1%),
although this was lower than figures in preceding years.
   Overall, world growth fell to -0.6%, after increasing by
3% in 2008.
    On another front, falling international demand, especially in
the opening months of 2009, brought about a 10.7% drop in the
volume of world trade in goods and services as well as lower
prices for commodities following 2008’s record levels. But these
figures turned around and started going up once again starting
the second half of 2009. Consequently, for the most part, the
level of inflation worldwide fell considerably, from 5.9% in 2008
to 2.2%.
     Foreign investment flows were down by some 40% in 2009,
for both developed and emerging/developing countries.
   As for financial markets, stock markets posted a drop at the
beginning of March to the lowest level of 2009, but then the
                              III
indexes of the main stock exchanges around the world started
on a generally upward trend, thanks to renewed confidence on
the part of investors, though still marked by sharp volatility.
    Instable evolutions also marked foreign exchange markets
in 2009. The main foreign currencies depreciated against the
US dollar at the beginning of the year thanks to its reputation as
a safe heaven. But as pressure on financial markets lessened
and certain indexes relating to world economic activity
improved, the dollar weakened, notably against the euro.
     The combined effect of initiatives taken to counter the crisis,
especially in developed countries, helped boost demand,
restore confidence among economic operators, and limit
systemic risk on international financial markets. Gradual
recovery in economic activity in industrialised countries began
in the third quarter of 2009, although unemployment soared to a
record level of 10% of the working population in most
industrialised countries, affecting 212 million people worldwide.
    Budgetary recovery programmes were accompanied by
expansionary monetary policies, notably in Industrialised
countries. In effect, these countries initially lowered their key
interest rates to record low levels before resorting to non-
conventional measures to boost their economies.
    Thus the US Federal Reserve (FED) maintained its key
interest rate unchanged at between 0% and 0.25%, starting mid
December 2008. In 2009 it continued to implement non-
conventional measures, notably increasing the ceiling for
purchase of mortgage claims backed securities.
    The European Central Bank (ECB) continued in 2009 to
ease its monetary policy, lowering on three occasions its key
interest rate to 1%, starting in May. There was also provision of
the liquidity needed by banks to provide financing to the
economy.
                             IV
    Moreover, in support of financial bail-out and economic
recovery programmes introduced by governments and central
banks, the international community stepped up efforts to
stabilise the world economy, to avoid collapse of the financial
system, and to mitigate the impact of the crisis. It was in this
framework that the G20 committed to mobilising the funds
needed to support the world economy, notably by increasing
the resources available to IMF and regional development banks
to grant loans. To this end, IMF introduced an allocation of
special drawing rights (SDRs) equivalent to 250 billion dollars to
increase the foreign exchange reserves of member States,
along with revision of its lending mechanisms so as to better
adapt them to the needs of these States.
     Thanks to the various measures taken by governments
(especially in industrialised countries) on the basis of financial
bail-out and economic recovery plans, the world economy in the
third quarter of 2009 began to gradually recover. Still, the
increase in public expenditure along with a drop in tax receipts
because of lower growth led to a considerable widening of the
budget deficit in industrialised countries, coming to an average
of 8.7% of GDP in 2009 vs. 3.6% a year earlier, with higher
levels in the USA, Japan and the Euro Zone. This sideslip was
one of the main factors triggering the public indebtedness
crisis in a number of countries in the Euro Zone.
    The crisis, sparked by the subprime mortgage fiasco and
turning into a full blown financial and economic crisis, has now
become a sovereign debt crisis. This illustrates that a stable
world economy can not be sustained in a context of deep-
seated structural imbalance reflected through the economic
poles based on two different growth models, the first involving
consumption and excessive indebtedness and the second
based on export and building up of major international reserves.
Furthermore, this imbalance is nurtured by the continually
growing gap between the financial sphere and the real
                          V
economy, unharnessed development of derivative financial
products, and non respect of the rules of transparency and
prudential management.
     Although the orientations adopted by the international
community notably in the framework of the G20 relating to
reform of world economic governance, control of markets and
financial products, and a sounder banking sector represent a
considerable contribution to preventing similar crises, the
effectiveness of such measures still depends on the ability
of the international community to arrive at the requisite
consensus on these measures and their effective
implementation. In fact, a definitive break with the causes of
this crisis imperatively requires use of a more balanced world
growth model, along with commitment by the various
actors in the financial sector to respect the profession’s
ethical framework as well as rules for the transparency of
financial transactions.
    Aware of the gravity of this issue, as soon as the crisis
broke out, Tunisia recommended in November 2008 intro-
duction of a code of conduct under the auspices of the
United Nations, targeting consolidation of world financial
markets supervision. This proposal has gained ground
over the past few years and proved to be very pertinent.
    Mr. President,
    In this particularly difficult situation and despite the reces-
sion that has shaken the world, the Tunisian economy has
managed to achieve satisfactory results in the pursuit of growth
and maintenance of financial balances, despite falling external
demand from Tunisia’s main partners, notably those in the Euro
Zone, which has brought about a drop in activity for certain
export-oriented sectors such as manufacturing industries,
tourism, air and maritime transport, and foreign investment.
                            VI
    There was 3.1% economic growth in 2009, thanks to a
good agricultural season and strong domestic demand
(particularly private consumption and public investment), while
the contribution of external demand to growth was negative,
due to 6.9% and 8.2% drops in export and import of goods and
services respectively, compared to 2008 figures.
    As for investment, gross fixed capital formation (GFCF)
grew by 8.1% in current prices in 2009 to some 14,052 MTD,
corresponding to an investment rate of 23.9% of GDP
compared to 23.5% a year earlier. The faster pace of public
investment helped offset slower growth in private investment,
whose share in GFCF dropped from 61.5% in 2008 to 57.4% in
2009.
    National savings rose by 5.8% in 2009 to 12,941 MTD,
which helped cover 89% of the amount required to finance
investment, up from 85% a year earlier.
    Foreign direct investment (FDI) fell by 33% in 2009 to 2,279 MTD.
This drop involved energy, real estate and tourism, while
investment in manufacturing industries and communications
continued to go up.
    Net job creation was affected by the prevailing difficulties
encountered by export companies, in the wake of falling
external demand. 57,000 new jobs were created in 2009 vs.
70,000 the year before, leading to an increase in the unemp-
loyment rate to 13.3% vs. 12.4% in 2008. Measures taken
starting the end of 2008 to boost the economy helped to
maintain many endangered jobs and to avoid an even higher
increase in the unemployment rate.
     As for public finance, income was affected by the impact
of slower economic growth and the drop in exports, while State
budget expenditure rose, notably because of higher investment
in the fields of basic infrastructure and community facilities, as
well as in support to private investment to foster economic
                           VII
recovery. Thus the budget deficit came to 3% of GDP in 2009
and the rate of public debt fell from 43.3% of GDP in 2008 to
42.9% in 2009.
    In the area of external payments, the current deficit
dropped to 2.8% of GDP, while the general balance of pay-
ments, given the level of net capital inflows, yielded a surplus of
2,204 MTD, bringing the level of net assets in foreign currency
at end 2009 to 13,353 MTD or the equivalent of 186 days of
imports. This compares to 11,656 MTD and 139 days at the end
of 2008.
    As for price trends, the inflation rate went down to 3.7% in
2009, compared to 5% the year before, thanks to adoption of
pertinent monetary policy and slower growth in price hikes for
food products and energy, in line with lower world prices and
ongoing price subsidies for basic consumer goods and oil
products.
     Overall, while these results represent significant perfor-
mance in a context of difficult conditions around the world in
2009, persistent volatility on financial markets and uncertainty
about prospects for the world economy require ever greater
vigilance and efforts to safeguard the stability of financial
balances and re-establish a growth rate that is high enough
to provide a greater number of jobs.
    This requires in particular greater efforts to enhance
economic competitiveness, by boosting productivity to
higher levels and by increasing the pace of exports,
through development of promising innovative sectors with
high technological content that can secure new foreign
markets. In this regard, it will be necessary to speed up the
creation of programmed technological and development poles
and to strengthen technological infrastructure to attract more
foreign investment, especially in the outlying regions of the
country. Similarly, it is important to pursue the setting up of
                             VIII
investment conferences, especially those specialised in pro-
mising innovative sectors, with the participation of all parties,
i.e. support structures, financing institutions, and technological
poles.
    Mr. President,
     Despite drying up of resources on world financial markets in
2009 and a sizeable drop in financing of economic activity
because of the lower level of transactions between banks,
Tunisia’s money market was marked by persistent excess
liquidity at banks, in line with the higher level of reserves in
foreign currency. The Central Bank of Tunisia continued to take
the measures required to regulate banking liquidity, to provide
an appropriate level of funds for financing of economic activity,
and to accompany conjunctural measures to support exporting
companies. To this end, given an easing in inflationary
pressure, the Central Bank at the beginning of 2009 lowered its
key interest rate from 5.25% to 4.50%, after having lowered the
reserve requirement rate at the beginning of the year. Likewise,
the Central Bank of Tunisia introduced new instruments in the
framework of implementing its monetary policy, in an effort to
help banks manage their cash flow better, both to meet their
need for liquidity and to place any excess at the Issuing
Institution. These are permanent 24-hour deposit and loan
facilities, used at the initiative of banks.
    Banking activity evolved in a favourable manner and
financial indicators for the sector improved, with net banking
proceeds posting an increase of 7.2%.
    As for loan portfolio quality, 2009 was marked by ongoing
banking efforts to keep risks down and to dynamically deal with
non performing loans, the share of which in overall
commitments fell from 15.5% at the end of 2008 to 13.2% at the
end of 2009. The ratio for coverage of non performing loans by
provisions also increased by 1.5 percentage point to 58.3% at
                            IX
the end of 2009, following a drop in the outstanding balance of
non performing loans and an increase in banks’ efforts to build
up provisions.
    At the same time, the financial system continued to work to
provide financing for economic activity, bringing the total
outstanding balance of loans to 36.3 billion dinars at the end of
2009, an increase of 10.6%. The higher volume of loans
involved various economic sectors, covering both operational
and investment loans. In effect, there were 2,533 approved
investment loan applications involving 4,340 MTD in loans, an
increase of 44% over the 2008 figure. In this regard, regional
investment and financing conferences have over the past few
years helped boost economic activity and new initiatives in
various regions of the country and they continued to be held in
2009, with massive participation by banks. This led to approval
of more than 500 initiatives for overall investment of 478 MTD
with the potential to create 11,400 new jobs. 301 initiatives have
already reached or are approaching the production stage.
    In this context, there is no doubt that the decision to
restructure the financing pole for small and medium sized
businesses will provide a new boost for investment by
creating synergy between the various operators. The
objective was to set up a global simplified framework to
increase the effectiveness of the system to finance and
create small and medium sized initiatives, developing the
components of interaction between the relevant parties in
evaluating projects, deciding on financing, monitoring the
use of investment funds to carry out an initiative,
improving the quality of services rendered to promoters,
and ensuring optimal use of financial, human and logistic
resources.
                             X
    Mr. President,
    Despite difficult world economic conditions, marked by the
recession caused by the crisis, Tunisia’s economy has
managed to achieve satisfactory results in diversifying sources
of growth and implementing economic, financial and monetary
policies, the effectiveness of which has been validated in
various reports by international organisations. Still, the rapidity
and depth of both domestic and external changes, the
challenges of globalisation, multiplication of financial
crises, and the growing role of emerging economies now
constitute major challenges that the national economy
needs to take up if the development process is to proceed
in an assertive manner.
    With the strategic orientations and choices that you have
included in your programme «Together we meet the
challenges» Tunisia is now entering a decisive stage in its
development process. This programme constitutes a new
opportunity for boosting the path to growth, as per its ambitious
objectives (both quantitative and qualitative), determined while
taking into account all the challenges posed by the current
context. This programme is based on an informed reading of
economic changes both national and international,
characterised by tougher competition, greater recourse to
technological progress, and technological mastery as an
essential vector for production systems and creation of wealth.
    Stemming from this programme, the orientations of the five-
year development plan covering the period 2010-2014 target
economic restructuring via enhanced technological content and
competitiveness, higher productivity, and greater integration in
the world economy.
    To reach these objectives, the programme gives priority to
heightening the pace of reforms to boost investment, notably
adoption of a new vision to encourage the creation of new
                           XI
businesses, based essentially on the introduction of an effective
system to encourage investment in innovative sectors and to
orient businesses toward new technologies.
    Moreover, given the central role of the banking sector in the
financing system and in the national economy, your presidential
programme for the upcoming five year period includes a
strategy for action that is part of a coherent reform process
based on an objective reading of the national banking
landscape and of worldwide changes on the one hand, while
adopting progressivity in reaching objectives, in line with the
requirements of the next stage and the sector’s ability to
assimilate the pace and diversity of reforms on the other hand.
    The programme’s 12th point is based on four related pillars,
constituting a platform targeting implementation of a more
dynamic banking system at the service of development and
capable of ensuring evolution of the Tunisian financial scene as
a promising site that will attract foreign investment.
    The first pillar involves strengthening of a financially
sound banking sector and modernisation of the manage-
ment rules that govern it, in line with international stan-
dards. In effect, this last world financial crisis constituted an
edifying test for the banking sector in Tunisia, proving its
capacity to absorb external shocks thanks to its financial and
operational potential, helping it to continue efforts to finance
investment and growth.
    The second pillar involves ongoing improvement in the
quality of banking services to bring them up to the level of
international norms, so as to create the conditions required to
support banking competitiveness in the framework of greater
opening to external financial centres. To this end, efforts will be
made to further advance recourse to banking services
throughout the economy and to provide easier access to
banking services. Similarly, the sector will be called on to
                            XII
pursue consolidation of its system to provide service to clients,
by improving modalities for serving clients and offering a
personal approach to meeting clients’ needs, using a
standardised framework based on the new capacities made
possible by modern technologies that facilitate communication
with clients.
    In the framework of strengthening the legal and regulatory
system governing relations between banks and their clients so
as to achieve greater efficiency and with regard to the need that
was all too apparent in this financial crisis for the world of
finance and banking to adopt stricter practices and behaviour,
the sector will adopt a code of ethics in the form of a
charter of quality and ethics that will constitute a frame of
reference to oversee and orient daily practices in the
processing of banking operations, which will undoubtedly
boost confidence among clients, be they private parties or
businesses.
    The third pillar involves restructuring of the banking
sector, in the sense of adoption of a new structure for public
banks capable of meeting the greater demands of strategic
sectors and major investment projects, exploiting synergy
between these banks, achieving economies of scale, and
putting in place a more reliable system of governance based on
monitoring of the performance of these banks and enhanced
complementarity between them. In parallel, the financial pole
«Al Moubadara» to be set up will be devoted to financing of
small and medium sized businesses via better coordination
between the various financing mechanisms available to this
category of businesses.
    The fourth pillar, which is the natural culmination and
crowning of the economic and financial reforms under way for
the past two decades, concerns instauration of total
convertibility of the dinar by 2014. Using the gradual and
progressive approach that has always characterised Tunisia’s
                            XIII
efforts in implementing economic and financial reforms, the first
phase of this process will involve setting up the pre-
requisites and prior conditions that will guarantee the
success of this process, while the second phase will be
devoted to introduction of measures and dispositions that
will give concrete form to the phase of total convertibility of
the dinar.
     This prior phase will require, in effect, a sounder macro-
economic framework, notably by enhancing competitiveness
and productivity, progress in implementation of effective
monetary policy capable of safeguarding the economy and the
national currency, conferring greater flexibility in exchange rate
policy, as well as a sounder banking sector and development of
its capacity to accompany the dynamics of financial transactions
abroad, which will be generated by liberalisation of the dinar. It
is thus suitable to ensure that the foreign exchange code
integrate the required changes in order to guarantee a smooth
transition to total liberalisation of the dinar.
    Given the importance of these challenges, the success of
these reforms requires that all stakeholders working in the
economic sphere in general and in the financial and banking
sectors in particular adopt greater commitment and
effectiveness and a deeper seated awareness of the extent of
the challenges to be met.


                                           The Governor

                                          Taoufik BACCAR
           CENTRAL BANK OF TUNISIA




          51st A N N U A L        REPORT

                 Fiscal Year 2009




                     Presented to
His Excellency the President of the Republic of Tunisia

         on behalf of the Board of Directors of the
                 Central Bank of Tunisia

                            by

            Taoufik BACCAR, Governor
TABLE OF CONTENTS
___________________________________________________
Introductory letter to His Excellency the President of the Republic from
Taoufik BACCAR, Governor



INTERNATIONAL ENVIRONMENT

I.     International environment ...........................................................  6
II.    International foreign exchange and gold markets .................... 20
III.   International capital markets ....................................................... 30
IV.    World commodities market ......................................................... 37

DEVELOPMENT OF TUNISIA’S ECONOMIC ACTIVITY

GLOBAL TRENDS IN ECONOMIC ACTIVITY ..................................... 48

I. Agricultural activity ......................................................................            53
II. Industrial activity ..........................................................................         65
III. Services .........................................................................................    83
IV. Prices ............................................................................................   104
V. Employment and wages ..............................................................                    111
VI. Investment ....................................................................................       117
VII. Foreign trade ................................................................................       125
VIII. External payments .......................................................................           145
IX. Foreign exchange market ...........................................................                   176
X. Public finances .............................................................................          182

MONETARY DEVELOPMENT AND DISTRIBUTION OF CREDIT

I.     Main economic, monetary and financial regulating measures ......                                   194
II.    Liquidity and balance of the financial system ...........................                          218
III.   Money aggregates and their counterparts .................................                          246
IV.    Total indebtedness ......................................................................          253
V.     Distribution of credit ....................................................................        256
VI.    Capital market ..............................................................................      263

FINANCIAL STATEMENTS OF THE CENTRAL BANK OF TUNISIA                                                       275
INTERNATIONAL ENVIRONMENT
                           I. INTERNATIONAL ENVIRONMENT
The world economy was shaken in 2008 and especially in 2009 by the most serious financial
and economic crisis since the Great Depression of the 1930s. The crisis began in the United
States but it spread and weakened the entire international financial system and caused a
tightening of credit and an increase in the cost thereof, a brutal drop in the value of assets,
and a lower volume of capital flows.
Such financial pressure, amplified by a drop in consumer and business confidence, brought
about a considerable decrease in global production and international trade, along with higher
unemployment. The main constraint to world growth involved the industrialised countries,
which entered into recession in the closing months of 2008 as the financial crisis was
extended to the real economy. This pertained in particular to corporate investment in the
most affected sectors and export of goods and services. Consumption was also down, since
households felt they had to save more money as employment situation deteriorated and
personal wealth was being lost due to drops in the value of real estate and financial assets.
Similarly, the economies of emerging and developing countries were hard hit by the lower
volume of exports and commodity prices, while inflows of international capital decreased.
Faced with such a serious situation, governments and central banks (especially in developed
countries) introduced major financial bail-out and economic recovery programmes, as
international instances and structures became more involved, seeking to promote reform and
intervention to get the world financial system back on its feet and to ensure economic
recovery as soon as possible.
Governments intervened mainly to rescue and recapitalize financial institutions in difficulty, to
ensure liquidity through the guarantee of inter-bank loans and client deposits and especially
to support renewed economic activity by means of wide-ranging budgetary support plans.
After the financial crisis broke out, in September 2008, central banks lowered their key
interest rates, down to record lows (near to zero in a number of countries) while adopting non
conventional monetary policy measures to inject into the economy the liquidity it needed.
At the same time, international cooperation was called on to limit the impact of the crisis,
notably in the framework of decisions taken by the Group of Twenty (G20) in early April 2009
and intervention by the International Monetary Fund (IMF), which granted unprecedented
financial support to a number of emerging and developing countries while easing conditions
for such loans.
The measures taken to stand up to the crisis helped prop up demand, re-establish
confidence among economic operators, and avoid systemic risk on international financial
markets. Thus, thanks to gradual recovery of economic activity in industrialized countries in
the third quarter of 2009, world economic recession was in the end held at 0.6% in 2009,
compared to 3% growth in 2008. Still, the high number of business and financial institution
bankruptcies brought about a sizeable increase in unemployment rates in most countries,
with a world average of 6.6% vs. 5.8% a year earlier, in addition to an increase in budget
deficits and public indebtedness, especially in industrialized countries. Moreover, falling
international demand and tighter credit, notably over the opening months of 2009, brought


                                                6
about a considerable drop in the volume of world trade in goods and services : -10.7%
compared to +2.8% a year earlier.

                            TRENDS IN CERTAIN WORLD SITUATION INDICATORS (In %)
                    12                                                                                   12
                    10                                                                                   10
                     8                                                                                   8
                     6                                                                                   6
                     4                                                                                   4
   In percentage




                     2                                                                                   2
                     0                                                                                   0
                    -2                                                                                   -2
                    -4                                                                                   -4
                    -6                                                                                   -6
                    -8                                                                                   -8
                   -10                                                                                   -10
                   -12                                                                                   -12
                     2005                  2006               2007         2008                    2009
                            World growth          Worldwide inflation   World trade of goods in volume



Commodity prices also went down compared to record highs in 2008, before taking off once
again on an upturn, notably in the second half of 2009, following a better economic outlook
and improvement in world demand. The price of crude oil, which underwent strong
fluctuations, enjoyed recovery and closed for 2009 on an increase of about 70% compared to
figures at the end of the previous year.
This trend, combined with economic recession in industrialised countries (especially given
underutilised production capacity) was reflected in lower inflation, though consumer prices
once again went up in developed countries in the closing months of 2009.
International investment flows fell by 39% in 2009, dropping from 1,697 billion dollars in 2008
to 1,040 billion in 2009, in line with a gloomy international scene, insufficient liquidity, investor
pessimism about economic prospects, a drop in corporate profits, and a net decrease in
merger-acquisition transactions. This drop held for developed countries (-41%), especially
the United States (-57%), Japan (-53%) and the European Union (-29%), as well as
emerging and developing countries (-35%), especially Latin America (-41%), southeast
Europe and the Community of Independent States (-39%) and Africa (-36%).
The main stock market indexes, after having fallen to their lowest levels of the year in early
March 2009, went up for the most part, while remaining highly volatile, influenced by
renewed investor optimism that created a run on risky but high-yield investments. Between
the end of 2008 and the end of 2009, the Dow Jones and the Nikkei rose by some 19%, the
CAC 40 by 20%, and the Nasdaq by 44%.
At the same time, international foreign exchange markets at the beginning of 2009 saw
depreciation of the main currencies against the US dollar, which took advantage of its status
as a safe investment. Since then, the fading of investor aversion to risk and the gradual
decrease in pressure on financial markets along with more optimistic expectations about
world economic activity caused a drop in the value of the dollar, notably against the euro,
whose rate passed the threshold of $1.51 to the euro on 25 November 2009. Overall,

                                                                7
depreciation of the dollar against the European single currency amounted to 2.5% between
end 2008 and end 2009.
A. WORLD ECONOMIC GROWTH
In 2009, developed countries experienced a deep recession, the origins of which date back
to 2007 when the real estate crisis in the United States spread to the local financial system
and then to other countries, notably western Europe and Japan. In addition to financial
difficulties and a deteriorating real estate market, excess production capacity held back
corporate investment, while household consumption suffered from loss of wealth and a
worsening job market. Since exports were also down, affected by lower international
demand, overall recession in the economies of this group of countries reached 3.2%, after
weak 0.5% growth in 2008.
Emerging and developing countries were also affected by the world financial crisis,
notably falling external demand, lower prices for exported commodities, and a lower volume
of foreign investment. Thus economic growth came to an average of 2.5% in 2009, down
from 6.1% a year earlier.
The United States, hard hit by the financial crisis, suffered recession conditions starting the
end of 2008 that became more acute over the first quarter of 2009. Restructuring of bank
balance sheets, the effects of diminishing wealth because of falling real estate and stock
market prices at the beginning of the year, and deterioration of the job market all weighed
heavily on the confidence of economic agents and consequently on domestic demand.
In this context, the Federal Reserve continued to carry out accommodating monetary policy,
with a key interest rate of between 0% and 0.25%. And the US government introduced
several measures to support the economy, the main initiative being a wide-ranging rescue
plan with 787 billion dollars in funding. This plan was based in particular on investment in
infrastructure, tax breaks, higher unemployment benefits, and other social assistance
programmes. In addition, it was decided to give households an $8,000 tax credit for acquiring
a first home, along with a premium for trading in old vehicles, offering up to $4,500 for the
purchase of a new car. These measures as a whole contributed to better economic activity
starting in the third quarter of 2009. Still, for the year as a whole, real GDP in the US dropped
by 2.4%, compared to a slight increase of 0.4% in 2008.
In the Euro Zone, economic growth was -4.1% in 2009, vs. +0.6% the year before. This
recession was due to the drop in corporate investment, influenced by tougher lending
conditions and a drop in company profitability, as well as a drop in exports. Household
consumption dropped only slightly, thanks to tax reductions and social transfers in the
framework of the 200 billion euro European recovery plan approved at the end of 2008,
which helped offset the effects of lost family wealth and higher unemployment. It should be
noted that this plan also included support to businesses and a number of sectors hit by the
financial crisis, such as home construction and automotive industries.




                                                8
In Germany, the leading European economy, growth was held back by shrinking exports and
corporate investment, and by the drawing down of stocks by businesses as foreign demand
diminished. On the other hand, household consumption rose slightly, helped by recovery
measures such as higher social allocations, lower income tax, and support for part time
employment. Also worthy of mention is adoption by the German government in early 2009 of
a second 50 billion euro economic recovery plan, on top of the 30 billion euros provided the
year before, along with setting up of a 100 billion euro public support fund for businesses
suffering significantly slower activity because of the international financial crisis. Despite
these measures, real GDP in Germany fell by 4.9% in 2009, compared to positive growth of
1.2% the year before.
In France, there was a 2.5% drop in real GDP, vs. a virtual stagnation (0.1%) in 2008.
Because of falling profits, excess production capacity and high indebtedness, businesses
reduced investment and moved to lower stock because of the drop in exports. On the other
hand, household consumption stood up relatively well, following some improvement in
purchasing power generated by price stabilisation and by the measures outlined in the
recovery plan, such as a premium for trading in an old car for a new one.
Italy, which was already in a reduced growth phase, saw its real GDP drop by 5% in 2009,
after falling by 1.3% the year before. This recession was the result of falling corporate
investment, tighter bank loans, and the lower volume in export of intermediary goods and
equipment, its main export products. Inversely, household consumption held up quite well,
thanks in particular to slower growing prices and expenditure for durable goods, boosted by
the premium for trading in old cars for new. It should be pointed out that the adoption of a
sizeable recovery plan to boost economic activity in Italy was impeded by the high level of
public debt.
In the United Kingdom, economic recession was also considerable in 2009, with a drop of
4.9% in real GDP vs. a slight increase of 0.5% a year earlier, despite support to the financial
sector, more accommodating monetary policy, and measures related to budgetary recovery
plan. Household consumption was down because of growing unemployment and lower
wages, as well as reconstitution of precautionary savings to make up for lost value in
personal wealth because of volatile stock market prices and lower real estate prices.
Corporate investment fell as it became more difficult to secure bank loans and as export
prospects worsened, in addition to the move to reduce stocks, which aggravated the
recession. In this context, the Bank of England continued to ease monetary policy at the
beginning of 2009, lowering its key interest rate on three occasions, bringing it to 0.5% on
5 March. It also enacted quantitative easing based on the acquisition of corporate bonds and
treasury bills, with funding increasing from 75 billion pounds sterling to 200 billion.




                                               9
TRENDS IN THE MAIN ECONOMIC AND FINANCIAL INDICATORS OF THE DEVELOPED
COUNTRIES
                                                                  Inflation
                           Economic           Budget                                               Unemployment
                                                                (Variation in   Interest rate
                            growth           balance                                               (% of working
      Description                                                consumer           (%)2
                         (volume & %)       (% of GDP)                                              population)
                                                                 prices %)1
                         2008    2009    2008      2009        2008      2009 2008       2009       2008    2009
    All developed
    countries              0.5    -3.2    -3.6      -8.7     3.4       0.1                           5.8     8.0
     Of which :
     United States         0.4    -2.4    -6.6    -12.5      3.8     -0.3      0.16       0.12       5.8     9.3
     Japan                -1.2    -5.2    -4.2    -10.3      1.4     -1.4      0.21       0.10       4.0     5.1
     Canada                0.5    -2.5     0.1      -5.0     2.4       0.3     1.50       0.25       6.2     8.3
     European Union        0.9    -4.1    -2.3      -6.8     3.7       0.9                           7.0     8.9
     of which :
      -Euro Zone           0.6    -4.1    -2.0      -6.3     3.3       0.3     2.49       0.35       7.6     9.4
       of which :
        *Germany           1.2    -4.9     0.0      -3.3     2.8       0.1     2.39       0.32       7.2     7.4
        *France            0.1    -2.5    -3.4      -7.9     3.2       0.1     4.00       1.25       7.9     9.4
        *Italy            -1.3    -5.0    -2.7      -5.3     3.5       0.8     3.38       0.69       6.8     7.8
      -United Kingdom      0.5    -4.9    -4.8    -10.9      3.6       2.2     2.00       0.50       5.6     7.5
                    Sources : World Economic Outlook and International Financial Statistics of the IMF and Eurostat

Japan, which was the hardest hit among developed countries by the international financial
crisis, suffered economic recession of 5.2% in 2009, following the previous year’s drop of
1.2%. This was due mainly to falling external demand, which hurt exports, the traditional
motor of economic growth. Consequently, companies in the manufacturing sector in
particular posted a drop in profits and they had to reduce their investment programmes,
especially in a context marked by insufficient liquidity and tougher conditions to obtain loans.
At the same time, household consumption fell, influenced by higher unemployment and lower
wages, which maintained the drop in retail prices. Deteriorating economic conditions led the
Japanese government to adopt two new budgetary recovery plans in 2009, making a total of
five such plans since the outbreak of the world financial crisis, seeking to boost domestic
demand and to get out of economic recession. The Bank of Japan continued to implement
accommodating monetary policy, mainly by keeping the key interest rate at a level near zero
and resorting to quantitative easing measures notably acquisition of corporate bonds and
treasury bills to provide them with the funding they required.
On the other hand, China was among the rare countries that stood up fairly well to
turbulence in the world environment, thanks to a huge three year recovery plan with funding
equivalent to 6.5% of GDP, committed as of 2008, focusing mainly on infrastructure. The
Central Bank implemented flexible monetary policy by lowering its key interest rate and the
reserve requirement rate as of September 2008, along with easing of loan restrictions
imposed previously to counter overheating of the economy. In addition, many measures and
tax incentives were undertaken starting in the end of 2008 to boost economic activity,
including lowering of the tax on added value applied to real estate operations and purchase
of automobiles, subsidies to the agricultural sector, and measures to support exports, as well
as social transfers. This pro-active strategy helped achieve a major increase in investment
and higher household consumption, further boosted by wage increases, renewed growth in

1
    Base 100 in 2000.
2
    Money market average rate for December of each year, except France (deposits interest rate).

                                                          10
jobs, price stabilization, and tax reductions. On the other hand, exports suffered extensively
from lower external demand, as was the case throughout the world. But overall, Chinese
economic growth remained robust in 2009 at 9.1% compared to 9.6% the year before.
In Southeast Asia, one of the main regions producing industrial goods, closely integrated in
the world economy, experienced a drop in exports starting the end of 2008 and continuing
into the early months of 2009, as corporate investment decreased throughout the world,
affected by shrinking availability of financing and deteriorating prospects for growth.
Countries in the region thus took measures to boost domestic demand, notably by
stimulation of household expenditure and development of basic infrastructure. It should be
noted that the Chinese recovery plan helped prop up the exports by countries in the region,
notably raw materials. The economic growth rate in the five main countries of the Association
of South East Asian Nations (ASEAN), i.e. Indonesia, Malaysia, the Philippines, Vietnam and
Thailand, came to just 1.7% in 2009, down from 4.7% a year earlier.
Latin American countries also suffered from the impact of lower world demand and
commodity export prices, the decrease in worker remittances and international capital flows,
along with a reduced number of tourist arrivals and tighter loans to the economy. Faced with
this situation, the countries most integrated in the world economy had to significantly lower
key interest rates, allow depreciation of real exchange rates for their currencies and
introduce recovery measures, in a context of falling external demand. Despite these efforts,
the economies of this region were not able to avoid recession, posting an average of -1.8%
for 2009, after 2008 growth of 4.2%. Mexico’s economy was hard hit, posting -6.5% growth
vs. +1.5% in 2008, because of its close links to the United States in the very sectors suffering
most from the financial crisis (notably real estate and automotive industries), the drop in oil
prices on the international market and the AH1N1 flu epidemic, which was particularly difficult
for the tourist sector.
Sub-Saharan Africa posted slowing economic growth : just 2.2% on average in 2009 vs.
5.6% the year before. This weak performance was due to weakening world demand and
exported commodity prices, the drop in tourism, and the lower volume of worker remittances,
foreign direct investment and public development assistance.
The countries of the Arab Maghreb Union were affected to varying degrees by fallout from
the world financial and economic crisis. The economies of Algeria and Libya felt the drop in
external demand and hydrocarbon prices, for which growth fell from 2.4% in 2008 to 2% in
2009 for the former and from 3.4% to 1.8% for the latter. The most diversified economies of
the region (Morocco and Tunisia) suffered from the drop in export of manufactured
products to the euro zone, as well as in tourism flows and worker remittances. Thus growth
rates fell from 5.6% in 2008 to 5.2% in 2009 for Morocco and from 4.5% to 3.1% for Tunisia.




                                               11
TRENDS IN SELECTED ECONOMIC AND FINANCIAL INDICATORS IN CERTAIN EMERGING
AND DEVELOPING COUNTRIES AND THE EUROPEAN UNION COUNTRIES
                                          Economic growth        Inflation (Variation in   Budget balance
            Description
                                            (volume & %)         consumer prices %)1         (% of GDP)
                                          2008      2009          2008         2009        2008        2009
    Countries of the EU                   0.9        -4.1           3.7          0.9        -2.3        -6.8
      of which :
      Spain                               0.9        -3.6           4.1         -0.3        -4.1       -11.4
      Portugal                            0.0        -2.7           2.7         -0.9        -2.8        -9.3
      Greece                              2.0        -2.0           4.2          1.4        -7.8       -13.6
    Emerging & developing
    countries                             6.1        2.5            9.2          5.2        -0.1        -4.3
      of which :
                                                                                                   2        2
      Tunisia                       4.5           3.1           5.0          3.7    -1.0         -3.0
      Morocco                       5.6           5.2           3.9          1.0     ..           ..
      Algeria                       2.4           2.0           4.9          5.7     ..           ..
      Egypt                         7.2           4.7          11.7         16.2     ..           ..
      South Africa                  3.7          -1.8          11.5          7.1     ..           ..
      Turkey                        0.7          -4.7          10.4          6.3     ..           ..
      Argentina                     6.8           0.9           8.6          6.3     ..           ..
      Chile                         3.7          -1.5           8.7          1.7     ..           ..
      China                         9.6           9.1           5.9         -0.7     ..           ..
Sources : World Economic Outlook and International Financial Statistics of the IMF, Eurostat, Ministry of
Development and International Cooperation and National Statistics Institute

The central and eastern European countries (CEEC), heavily integrated with western
Europe at the level of external economic and financial relations, were seriously affected by
deteriorating world conditions, increasing their vulnerability. In effect, high growth in these
countries over the past decade brought about considerable disequilibrium in some of them,
such as soaring real estate costs, heavy deficits in the balance of current payments, and
especially high external indebtedness, reflecting how dependent on foreign financing
investment had become. Thus the inversion of capital flows after the international financial
crisis broke out acted as a constraint for investment and consumption. In addition,
depreciation of national currencies in the concerned countries caused a heavy burden for
businesses carrying debt in foreign currencies, obliging them to considerably reduce their
investment programmes and to proceed with massive layoffs.
Higher unemployment in the region along with lower wages had an impact on household
consumption, while the drop in external demand and lower commodity prices brought about
lower export volume. Consequently, real GDP in the region was down by 3.6% in 2009,
compared to 3.1% growth a year earlier. This was particularly true for Romania, where
growth plummeted from +7.3% in 2008 to -7.1% in 2009.
Poland, the leading economy in the region, was the only country to avoid recession, thanks
to the low degree of opening to the outside world and the conduct of appropriate
macroeconomic policy. Moreover, Poland managed to implement a programme to boost
public investment and to take measures to reduce taxes for households so as to boost
domestic demand. This led to a 2009 growth rate of +1.7%, compared to 5% in 2008.



1
    Base 100 in 2000.
2
    Excluding privatisation and grants.
                                                            12
The Baltic States (Estonia, Latvia and Lithuania) were hard hit in 2009 by the economic
recession, yielding negative growth rates of 14.1%, 18% and 15% respectively. This drop
was due to reduced inflows of foreign capital (leading to a drop in loans to the private sector)
as well as to falling external demand (exacerbated by falling corporate investment and
reduction of stocks). Furthermore, the three countries in question found themselves obliged
to prop up their foreign exchange systems in order to avoid bankruptcy of a private sector
carrying considerable debt in foreign currency. They had to seek help from international
financial institutions because of insufficient foreign currency reserves and adopt austerity
policies that weighed on economic growth.
Russia felt the impact of falling foreign demand from its main trading partners, lower world
commodity prices, and massive outflows of capital, which brought about strong depreciation
of the rouble. Economic activity was also affected by flat household consumption and private
investment. To prop up the economy, Russia’s central bank lowered its refinancing interest
rate considerably, down from 13% in 2008 to 8.75% in 2009, and the Russian government
adopted a wide-ranging budgetary recovery plan. But this was not enough to avoid negative
growth (-7.9%) in 2009, after an increase (5.6%) the year before.
B. EMPLOYMENT
Recession in the world economy in 2009, in particular in the industrialised countries, caused
considerable deterioration on the job market and a marked increase in unemployment. The
number of unemployed reached a record level of 212 million and the worldwide
unemployment rate climbed from an average of 5.8% in 2008 to 6.6% in 2009.
Developed countries were the hardest hit by higher level of unemployment, with the
average rate increasing from 5.8% in 2008 to 8% in 2009. It should be pointed out that lost
jobs concerned the industrial sector more than agriculture and services.
In the United States, the economy caused 4.8 million jobs to be lost in 2009, mainly in
finance, insurance and services to businesses. Thus the unemployment rate rose
significantly, exceeding 10% in the closing months of the year, with the average annual rate
posting 9.3% vs. 5.8% in 2008.
In Japan, the increase in unemployment was less severe, thanks to a programme to
maintain jobs that encouraged businesses to keep their employees. The unemployment rate
rose from 4% in 2008 to 5.1% in 2009.
In the Euro Zone, there was an increasing number of plans to eliminate jobs because of the
recession, a drop in investor confidence, and falling corporate profitability. 2.7 million jobs
were lost and the unemployment rate reached an average of 9.4% in 2009, up from 7.6% a
year earlier. This increase involved all countries, though to varying degrees mainly Spain,
Slovakia and Ireland whose unemployment rates were the highest in the Euro Zone : 18%,
12.1% and 11.8% respectively, compared to 11.3%, 9.6% and 6.1% in 2008. Soaring
unemployment in Spain and Ireland in particular was attributable to a drop in activity in the
building sector, the share of which in overall employment was relatively high. Similarly, the
unemployment rate in France rose from 7.9% in 2008 to 9.4% in 2009.



                                               13
In Germany, on the other hand, the unemployment rate went up only slightly, from 7.2% in
2008 to 7.4% in 2009, thanks to deep-seated reforms carried out on the job market over the
past few years. In addition, in 2009 a system to cover partial unemployment was introduced
by the State to help companies retain staff without having to resort to layoffs. The German
government made this new mechanism more advantageous by extending its maximum
duration and subsidizing to a high degree the contributions to social security that businesses
must pay on their wage-earners’ loss of earnings.
In emerging and developing countries, rising unemployment concerned all regions, but to
varying degrees. It was very high in the region of central Europe, south eastern Europe, and
the Commonwealth of Independent States, which was hard hit by fallout from the financial
crisis, with an unemployment rate that reached an average of 10.3% in 2009 vs. 8.3% a year
earlier. Similarly, the unemployment rate increased in Latin America and the Caribbean, up
from 7% in 2008 to 8.2% in 2009.
C. WORLD TRADE
International trade in goods and services slowed considerably starting October 2008. The
drop in imports by developed countries became more marked as the financial crisis
deepened, in a context marked by reduced access to commercial loans and tighter
conditions for securing them. To that was added uncertainty about world economic
prospects, which caused a drop in investment and thus reduced trade in capital goods as
well as raw materials and semi-finished products.
Thus the volume of world trade in goods fell by 11.8% in 2009, compared to 2.4% growth the
year before. In terms of value, exports fell by 22.5% (vs. an increase of 14.8% in 2008) to
12,285 billion dollars, following drops in both quantities exported and prices, notably for
commodities. This latter factor was the cause for deteriorating terms of trade for emerging
and developing countries (-4.9% vs. 3.5% in 2008) and better terms of trade for developed
countries (+4% vs. -2.2%).
Similarly, the value of export of services fell in 2009 by 11.8%, following the previous year’s
increase of 12.4%, posting 3,431 billion dollars. This drop involved financial services and
international transport as well as tourism, which was doubly affected by the effects of the
world economic and financial crisis and spread of the AH1N1 flu epidemic.
D. BUDGETARY AND MONETARY POLICIES
Public finances paid a high price because of the world financial and economic crisis, seeking
to contain the recession that resulted from it. In effect, State expenditure increased
significantly in order to fund the various measures taken by governments, especially in
industrialised countries. These measures included plans to bail out financial systems and
recapitalize financial institutions, as well as plans to support certain branches in difficulty
such as automotive industries, even wide ranging plans to get the economy back on track, all
meant to boost domestic demand and ease the recession that was causing huge losses in
tax revenue. Consequently, the average budget deficit in developed countries grew from
3.6% of GDP in 2008 to 8.7% in 2009.



                                               14
In the United States, public accounts were affected by the drop in tax revenue in the wake of
lower income for both businesses and households and by higher expenditure for bail out of
the financial system, for measures to prop up mortgage refinancing public structures, and for
additional expenditure tied to the three year budgetary recovery plan. Thus the US budget
deficit reached a record high in 2009, up from 6.6% the year before to 12.5% of GDP.
The public deficit in Japan went up to 10.3% of GDP, compared to 4.2% in 2008, reflecting
introduction by the government, as soon as the financial crisis hit, of numerous recovery
plans meant to get the economy going again.
In the Euro Zone, the average budget deficit rose from 2% of GDP in 2008 to 6.3% in 2009,
a level considerably higher than the ceiling of 3% set by the stability and growth pact. This
deterioration of public accounts was due to higher expenditure, following measures taken to
boost the economy and counter the increase in unemployment. Tax revenue went down as
economic activity decreased in general and housing construction in particular, since this
sector is a major source of revenue for countries such as Spain and Ireland, which were hard
hit by bursting of the real estate bubble.
All the countries in the Euro Zone posted an excessively high budget deficit in 2009 and the
situation became worrisome for certain countries such as Portugal, Ireland, Greece and
Spain. The economic situation in Ireland and Spain as well as France was such that the
European Commission considered it necessary to review the existing recommendations
concerning them, extending by one year the deadline previously set for the deficit to get back
down under the ceiling of 3% of GDP, i.e. 2013 for France and Spain and 2014 for Ireland.
As for the other countries in the Euro Zone also concerned by the excessive public deficit
procedure, the correction of public accounts should be achieved by 2013 latest. For Belgium
and Italy, where public debt is relatively high, the time frame for reducing their budget deficit
is set for 2012.
Adoption of budgetary recovery plans took place along with an expansionary trend in
monetary policy. This was the case notably in industrialised countries that, after having
reduced their key interest rates to record lows, had recourse to non conventional measures
to support the granting of loans to the economy.
Thus the US Federal Reserve left its key rate unchanged at between 0% and 0.25% from
mid December 2008, and it pursued in 2009 the non conventional measures it had begun to
apply a year earlier. In effect, it continued to supply abundant liquidity at flexible conditions to
financial institutions and it increased its long term acquisition of top quality securities. This
allowed for lowering of long term interest rates, in particular mortgage rates, so as to improve
the functioning of the loan market.




                                                 15
                                           FED FUNDS RATE IN THE UNITED STATES (In %)

   5.00
             4.50
   4.50                             4.25

   4.00
                                                        3.50
   3.50
                                                                     3.00
   3.00

   2.50                                                                                  2.25
                                                                                                                  2.00
   2.00
                                                                                                                                      1.50
   1.50
                                                                                                                                                     1.00
   1.00

   0.50                                                                                                                                                     0 - 0,25

   0.00
                       11/12/2007




                                                                                                                         08/10/2008
          31/10/2007




                                           22/01/2008
                                                        30/01/2008



                                                                            18/03/2008



                                                                                                30/04/2008




                                                                                                                                        29/10/2008




                                                                                                                                                              16/12/2008
In this framework, the amount of debt recovery from governmental mortgage refinancing
agencies shot up from 100 billion to 175 billion dollars on 18 March 2009 and the ceiling for
purchasing securities tied to mortgage claims held by these agencies went up by 500 billion
to 1,250 billion dollars. On this same date, the Federal Reserve introduced a programme to
purchase 300 billion dollars in Treasury bonds.
The Bank of Japan carried out accommodating monetary policy by maintaining its key
interest rate at 0.1% from December 2008 and by introducing a system of short term
emergency loans to banks and a programme to purchase treasury bills and corporate bonds.
These last two measures, meant to provide companies with the financing they need, expired
at the end of 2009. The BoJ also increased its firm purchases of State bonds and extended
the range of collateral eligible for refinancing operations to include State loans and those
covered by public guarantees.
The European Central Bank (ECB) continued to ease its monetary policy in 2009 by lowering
its key interest rate on three occasions, bringing it to 1% as of 7 May. It also extended its
policy of greater support to lending. It was in this framework that it carried out three
refinancing operations, at the end of the second, third and fourth quarters, with a duration of
one year. It also decided to acquire a portfolio of secured bonds for an amount of 60 billion
euros for a period of one year, from July 2009 to June 2010.
The ECB decided to make the European Investment Bank (EIB) eligible for its monetary
policy operations, given the active role that this institution plays in the field of financing for
small and medium-sized businesses within the Euro Zone.




                                                                                                             16
                       REFINANCING RATE (REFI) IN THE EURO ZONE (In %)

   4.50                                             4.25
                                4.00
   4.00                                                         3.75
   3.50                                                                               3.25
   3.00
                                                                                                      2.50
   2.50
                                                                                                                          2.00
   2.00
                                                                                                                                              1.50
   1.50                                                                                                                                                       1.25
                                                                                                                                                                                  1.00
   1.00
   0.50
   0.00
          31/12/2007




                                       03/07/2008




                                                            08/10/2008
                                                                         06/11/2008

                                                                                         04/12/2008



                                                                                                             15/01/2009



                                                                                                                                 05/03/2009


                                                                                                                                                 02/04/2009


                                                                                                                                                                     07/05/2009
Long term yield rates on bond markets continued to drop at the beginning of 2009, influenced
by the impact of the economic recession in industrialised countries and aversion to risk on
the part of investors who turned to sure assets. A waning of aversion to risk and better
economic prospects in the wake of the exceptional measures taken by governments and
central banks to prop up the economy and financial institutions led investors to reallocate
their portfolios in favour of stock markets. Still, this change in behaviour did not bring about
higher yields, which continued on a downward trend. This was due mainly to record lows for
the key interest rates of the main central banks and purchase by these institutions of
debenture notes in the framework of quantitative easing of their monetary policies. In
addition, acquisition of these securities by banks that gave preference to holding no-risk
assets in order to restructure their balance sheets, contributed to downward movement for
long-term interest rates.
E. INFLATION
The drop in economic activity and thus of demand throughout the world, which brought about
lower commodities prices compared to 2008’s record levels, was the reason behind reduced
inflation in 2009.
In developed countries, inflation rates even turned negative over the summer before
increasing anew starting in November 2009. For the year as a whole, consumer prices for all
these countries remained more or less stable (+0.1%), compared to an increase of 3.4% in
2008.
In the United States, consumer prices fell by 0.3% on average, compared to an increase of
3.8% the year before, in line with excessive production capacity in a context of falling
demand and lower prices for foodstuff, energy and housing.
In the Euro Zone, the inflation rate came to just 0.3% in 2009, compared to 3.3% a year
earlier, reflecting the economic slowing that took pressure off wages and prices, in addition to
the drop in world commodity prices and the impact of appreciation of the euro on the cost of
imports.
                                                       17
In Japan, lower wages, the decrease in prices for industrial raw materials and energy, and a
vigorous yen for much of the year accentuated deflationary pressure caused by flat domestic
demand. Thus the overall level of consumer prices in this country fell by 1.4% in 2009,
compared to +1.4% in 2008.
In emerging and developing countries, inflation experienced considerably slower growth,
falling from 9.2% to 5.2% on average from one year to the next, because of slowing
economic activity and a drop in prices for foodstuffs and fuel.
F. INTERNATIONAL COOPERATION
The international community in 2009 expanded its assistance with a view to stabilising the
world economy, to avoid collapse of the financial system, to re-establish confidence, and
especially to reduce the economic and social cost of the financial crisis. It was in this
framework that the G20, made up of developed and emerging countries, met on many
occasions in 2009 to take the measures required to boost economic activity and employment
once again, get the international financial system back on track, re-establish granting
of loans, strengthen financial regulation, promote world trade and investment, and ensure
tenable and sustainable recovery. At their summit on 2 April 2009 in London, the
G20 countries committed to mobilizing 1,100 billion dollars in funding to prop up the world
economy. Of this amount, 250 billion dollars went to financing world trade and 100 billion
were granted to regional development banks, while IMF borrowing resources were to be
tripled (from 250 billion to 750 billion dollars), to be funded bilaterally by member States.
It should be pointed out that these resources include bilateral commitments made by certain
member states such as Japan in February 2009 in the amount of 100 billion dollars and the
European Union in March for 75 billion euros.
This increase in resources, which was accompanied by IMF’s selling of more than 200 ton-
nes of gold to a number of central banks, sought to provide the Fund with the money
required to meet the needs of member States affected by the world financial crisis. To this
end, IMF loan commitments came to the unprecedented amount of some 101 billion dollars
in 2009, going in particular to Mexico (48.6 billion dollars), the Ukraine (17 billion) and
Hungary (16.3 billion).
Furthermore, in the framework of measures taken by the G20 in April 2009, IMF established
an allocation of special drawing rights (SDR) equivalent to 250 billion dollars to build up the
foreign currency reserves of member States. Of this amount, 100 billion dollars is reserved
for emerging and developing countries, of which 18 billion will go to low-income countries.
IMF also decided to double the ceiling for borrowing by poor countries. It also proceeded to
reform its lending techniques in order to adapt them as much as possible to the needs of
member states, through easing of conditionality and confirmation agreements, simplification
of costs and of payment dates, and creation of a new flexible line of credit, designed to grant
the funds needed immediately by member states affected by the international financial crisis
whose economic fundamentals are sound.
The World Bank granted a record volume of financial assistance to poor countries hard hit by
the crisis in the amount of about 60 billion dollars throughout 2009. These funds were

                                               18
devoted to social protection programmes for the most vulnerable populations, maintaining
investment in infrastructure and support to small/medium-sized businesses and micro-
finance. In addition, at the request of the G20, this institution released a further 1.3 billion
dollars in favour of poor countries to help them overcome the adverse effects of the financial
crisis.
As for multilateral cooperation, the World Bank, the European Bank for Reconstruction and
Development, and the European Investment Bank presented a common programme on
27 February 2009 involving 24.5 billion euros in the form of loans to prop up the banking
system in the countries of central and eastern Europe hard hit by the financial crisis and
thus guarantee access to financing for businesses, especially small and medium-sized
companies.
Furthermore, the World Bank, the Inter-American Development Bank, and other multilateral
financial institutions announced on 23 April 2009 that it would release 90 billion dollars over a
period of two years to the countries of Latin America that were encountering considerable
difficulties in accessing international financial markets because of the crisis.
Similarly, the United Kingdom and France on 3 October 2009 took the initiative to grant a
4 billion dollar loan with equal shares to poor countries, to be managed by the IMF. These
resources are meant to help African countries finance development initiatives, with a view to
overcoming the adverse effects caused by the world economic and financial crisis.
As for regional cooperation, 13 countries in southern and eastern Asia decided on 3 May 2009
to set up a 120 billion dollar fund to provide liquidity to those among them that needed such
funds to counter the effects of the financial crisis. Japan and China were each to contribute
32% to the resources of this fund, South Korea’s share was 16%, and the 10 ASEAN
member States were to provide the rest.
Japan made a commitment at the end of January 2009 to grant development assistance in
the amount of 17 billion dollars to help the countries of the region. This amount was to go
mainly to infrastructure projects, to stimulate domestic demand and boost the economy.
At another level, the amount of merger-acquisition transactions carried out in 2009 at the
world level fell by some 28% to about 2,073 billion dollars. This drop was due in particular to
lower corporate profits and limited credit, as well as to the difficulties encountered by
sovereign Funds, which had become active actors on the market the preceding few years,
affected by the drop in revenue from exports that provided revenue to their home country and
by the losses suffered from stock market fluctuations and plummeting indexes in the opening
months of 2009. Finance continued to be the sector most concerned by these operations,
with a 20% share of total, in line with the move to consolidate at banks and financial
institutions. All regions experienced a decrease in merger-acquisition operations, notably
Europe (-50%) with an envelope of 580 billion dollars and a 28% share in total. The United
States of America, despite a drop of 22% compared to the 2008 figure, continued to retain
the lion’s share in such operations, with 720 billion dollars or some 35% of total.




                                                19
         II. INTERNATIONAL FOREIGN EXCHANGE AND GOLD MARKETS
In a global context marked by uncertainty about the world economy’s ability to overcome the
effects of the financial crisis, steps were taken to encourage investors to turn back to carry
trade strategies in 2009 : key interest rates were kept exceptionally low by the main central
banks and there was easy access to liquidity. The first signs of macroeconomic stabilisation
thus affected low-yield currencies, particularly the dollar and the yen, which depreciated over
much of the year. A persistently fragile dollar put into question its status as the main currency
for international reserves, leading emerging powers to call for a supranational currency. The
euro, which took advantage of the drop in the dollar midyear, experienced phases of
depreciation in the first and last quarters of 2009, affected notably by a general increase in
sovereign risk on the debt of certain countries in the euro zone and exposure of the
European banking system to the countries of the East.
For the year as a whole, the dollar lost 2.4% of its value against the euro and 9.5% against
the pound sterling, while appreciating by 2.5% against the yen.
THE EXTENT OF VARIATION IN THE MAIN EXCHANGE RATES IN 2009
 EXCHANGE
                    END 2008             LOWEST                HIGHEST              END 2009
   RATE
                                          $ 1.2455             $ 1.5144
  EUR/USD           $ 1.3978                                                        $ 1.4316
                                         (04/03/09)           (25/11/09)
                                          ¥112.04              ¥ 139.21
  EUR/JPY           ¥ 126.64                                                        ¥ 133.03
                                         (21/01/09)           (05/06/09)
                                           ¥ 84.81             ¥ 101.45
  USD/JPY            ¥ 90.60                                                         ¥ 92.90
                                         (27/11/09)           (06/04/09)
                                          $ 1.3498             $ 1.7042
  GBP/USD           $ 1.4626                                                        $ 1.6154
                                         (23/01/09)           (05/08/09)

Emerging currencies took advantage of a renewed taste to assume risk and of greater capital
flows to currencies tied to raw materials.
And gold had a record year, in which it crossed the psychological barrier of $1,200 per
ounce, due mainly to higher demand for investment motivated by fears of sovereign default
and by diversification of reserves by certain central banks in favour of gold.
A. FOREIGN EXCHANGE MARKETS
1. INDUSTRIALISED COUNTRIES
International foreign exchange markets were marked in 2009 by depreciation of the dollar
against most of the other international currencies. The dollar, in effect, lost its attraction as a
safe investment, influenced in particular by better economic indicators on both sides of the
Atlantic, which helped boost optimism about a gradual end to the crisis and recovery in the
world economy. The dollar’s downward trend reversed in December as fears reappeared
about sovereign risk, particularly the Greek debt crisis, which caused the dollar to shoot up
once again to levels near those of early 2009. As for the pound sterling, 2009 was a year of
recovery, following the sharp drop caused by the crisis.




                                                20
a- Trends in the EUR/USD and USD/JPY
Over the first quarter of 2009 the US dollar for the most part followed an upward trend
against the main currencies, reaching its highest level of the year against the euro (1.2455)
on 4 March 2009. Compared to 1.3842 at the beginning of January, this represented an
increase of more than 11%.
This trend was favoured by greater investor aversion to risk, due to persistently tense
financial conditions, a worsening outlook for worldwide growth (with data continuing to show
significant deterioration both for growth and jobs), along with an ongoing drop on
international stock markets. In effect, the Dow Jones lost more than 13% over the first
quarter of the year, posting its lowest level in March.
This climate of mistrust on the part of investors brought about a movement towards security,
notably to US Treasury securities. This drew capital to the United States and benefited the
US dollar.
Certain analysts also attribute the rise of the dollar to better reactivity on the part of American
decision makers compared to their counterparts in other, notably European, countries. There
was for example the drastic lowering of key rates and implementation of colossal
programmes to bail out the financial sector and boost the economy. The Fed was the central
bank that took the most energetic measures to counter the crisis. In effect, on 5 January, the
Federal Reserve implemented a programme to purchase securities leaned to mortgages in
order to ease lending conditions on this market. On 16 January, the US Treasury
department, the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC)
announced an agreement to provide guarantees and access to additional liquidity via the
Troubled Asset Relief Program (TARP). Furthermore, on 10 February, the US Treasury
made known the Government’s intention to introduce an economic recovery plan with
787 billion dollars in funding.
On the opposite end, despite worsening economic conditions in the euro zone (lower
industrial production and exports for France and Germany), the Board of Governors of the
European Central Bank (ECB) lowered its key rate by just 50 base points (to 2%) at its
15 January meeting, an accommodation considerably below expectations. Then at its
5 February meeting, the ECB once again proved a disappointment to the market when it
decided to leave its key rate unchanged at 2%, which caused many investors to question the
ability of the euro zone to face up to the adverse consequences of the world crisis with as
much determination as the Federal Reserve.
Furthermore, considerable deterioration in the public finances of a number of countries in the
euro zone weighed on the single currency. In effect, in early January Standard & Poor’s
lowered the sovereign rating of some of these countries, citing lower competitiveness and
slower growing domestic demand. The single currency was also adversely affected by
several reports underlining the difficulty that certain eastern European countries were
encountering in repaying debt, most of their foreign debt being financed by the main
European banks.



                                                21
But toward the end of February, senior European officials announced that the euro zone was
determined to help its neighbours, and this generated considerable support for the euro.
Moreover, ongoing uncertainty about the soundness of the US banking sector and rumours
about the possible nationalisation of certain banks caused concern among market operators
holding long positions on the dollar and this led them to reduce their portfolios, despite
50 base point monetary easing by the ECB on 5 March 2009. The dollar thus fell against the
euro in March to 1.3737 USD before posting an upward trend the last week of the quarter,
influenced by prospects that the ECB would further lower its key rates, closing for the second
quarter at 1.3250 USD.
Against the yen, the dollar traded between 87 and 98 over the first two months of the year,
hitting a record low of 87.11 JPY the third week of January, compared to 91.26 at the
beginning of the year. The dollar then appreciated by more than 13% to close for the first
quarter at 98.84 JPY, with investors speculating on the phasing out of factors that had
contributed to appreciation of the yen since the beginning of the world crisis, notably in light
of concern about the impact of slowing world demand on Japanese exports. On 22 January,
the Bank of Japan decided to maintain its key rate unchanged at 0.1% and announced other
measures to counter increasingly difficult financial conditions, notably purchase of Japanese
sovereign bonds. This fed market fears about Japan’s capacity to stimulate its economy,
given the high level of public indebtedness, which constituted an additional negative factor
for the Japanese currency.
In the second quarter, the dollar continued to move upward against the euro in the first
three weeks of April, to reach its highest level (1,2883 USD) on 20 April after the ECB
reduced its refinancing rate by a lower-than-expected 25 base points to 1.25% on 2 April
2009. The widely expected monetary easing introduced by the ECB on 7 May, bringing the
key rate to 1%, had no particular impact on markets.

                                  TREND IN EUR/USD IN 2009

   1.6200                                                                              1.6200




   1.5200                                                                              1.5200




   1.4200                                                                              1.4200




   1.3200                                                                              1.3200




   1.2200                                                                              1.2200
        02-Jan-09              03-May-09                01-Sep-09               31-Dec-09




                                              22
But the US currency then depreciated rapidly, reaching 1.4337 USD (its lowest level for the
quarter) on 3 June, a drop of more than 10% compared to its highest figure in April. This
movement was made possible by renewed interest in risk and growing optimism about the
chances of recovery in the world economy after significant improvement in economic
indicators, both in the economies of the G-10 and emerging economies. Moreover, the
market interpreted higher demand for raw materials from China as a positive sign, with
budgetary expenditure committed by the Chinese Government starting to bear fruit in
supporting domestic demand, which helped further boost operator confidence about world
economic prospects.
The calming of anxiety was also attributable to the incentives adopted at the Group of
20 meeting in early April, meant to mobilise some $1,100 billion in additional resources from
IMF and institutions that finance trade and development in order to stimulate international
trade and calm financial pressure.
Gradual improvement in conditions in the financial sector was another factor contributing to
re-establishing investor confidence, all the more so with the main Wall Street banks returning
to profitability and some even beginning to repay a portion of the bail-out money received
from the Troubled Asset Recovery Program (TARP). The globally positive results of stress
tests carried out by the Federal Reserve at 19 US banks also helped calm uncertainty about
the health of the financial sector.
The US dollar closed for the second quarter at 1.4033 USD to the euro.
The yen remained under pressure over the first two months of the second quarter, posting its
lowest rate for the year against the dollar on 6 April (101.45 JPY) as optimism grew about
international economic conditions and investors became more willing to incur risk, which
reduced the yen’s attraction at the beginning of the year as a safe investment. Still, renewed
fears on the market because of high unemployment rates (which continued to weigh
on consumer expenditure) and concern heightened by worsening budget deficits for
G-10 countries were beneficial to Japan’s currency, which managed to rally to end for the
quarter on an upturn, posting 96.31 JPY.
The third quarter was marked by increasing signs of improvement in economic conditions.
This continued to weigh on the dollar, reducing its attraction as a safe investment. In effect,
macroeconomic data showed some slowing of economic activity in the United States, notably
in manufacturing and housing, with a drop in the pace of lost jobs. Significant recovery in
growth in China also led to more optimism about emerging markets. During this quarter the
single currency took advantage of renewed consumer confidence in the euro zone and
recovery in industrial production, boosting optimism about the zone’s economic prospects.
Statements by Senior officials at the central banks of certain countries about standardisation
of their monetary policies in the near future, notably that of the Central Bank of Australia,
contributed to plummeting of the US dollar, which closed for the quarter at 1.4635 USD after
hitting its lowest point for that three month period at 1.4842 USD on 23 September.
Against the yen, the dollar dropped over the first two weeks of the quarter to 91.72 JPY,
down from 96.34 JPY at the beginning of the quarter. Japan’s currency benefited from funds

                                              23
repatriated by Japanese investors at the beginning of the second half of the year and from its
status as a safe investment, following renewed aversion to risk as the time for quarterly
results approached.

                                TRENDS IN USD/JPY IN 2009

  105                                                                                    105




  100                                                                                    100




   95                                                                                    95




   90                                                                                    90




   85                                                                                    85
   02-Jan-09                 03-May-09                  01-Sep-09                  31-Dec-09



But the yen again took off on a downward trend, posting 97.78 JPY at the end of the first
week of August, as world stock markets and raw materials markets bounced back and solid
results for a number of US companies boosted optimism and reduced the attraction of the
yen as a safe investment.
Starting the second week of August, the Japanese yen did better than the other main
currencies, on the strength of forecasts of positive economic growth in Asia. The Japanese
currency also profited from election results in the Japanese lower house on 30 August, which
gave greater visibility to the short term outlook for Japan’s economic policy. The yen closed
for the quarter at 89.75 JPY, posting an overall increase against the dollar of almost 7% for
the quarter.
Over the fourth quarter, the dollar continued to slide against the euro, reaching
1.5144 USD on 25 November, its lowest level for the year.
Clear improvement in world economic and financial conditions (reflected among other things
by upward revision of growth projections in developed and emerging countries) reduced the
attractiveness of the dollar as a safe investment. The greenback also suffered over the first
two months of the fourth quarter from prospects that US interest rates would remain at their
lowest levels for an extended period, which was detrimental to assets labelled in dollars.
These assumptions were further reinforced by the monetary status quo confirmed by the Fed
at the meeting of its monetary policy committee in November, at the end of which members
of the Federal Open Market Committee (FOMC) reaffirmed that economic conditions
continued to justify an exceptionally low level of interest rates for an extended period.
But in December the dollar appreciated against most of the main currencies. Renewed fears
about the outlook for sovereign risk, mainly on the edge of Europe, weighed on prospects for
the euro zone and the United Kingdom. Greece’s financial prospects were particularly
                                             24
worrisome, notably after the decision of the main rating agencies to downgrade its rating and
to put Greece on rating watch negative.
Market concerns also involved other countries in the euro zone (like Spain and Portugal),
which were put on rating watch negative by Standard & Poor’s because of widening budget
deficits. These fears grew after the Emirate of Dubai’s financial difficulties at the end of
November, which caused downgrading of ratings in more than a dozen entities with ties to
the Emirate.
Furthermore, speculation about possible withdrawal in the near future of quantitative easing
measures played in favour of the dollar in December. Speculation became even greater after
the Fed’s last meeting of the year, when the Board of Governors announced that most of the
Federal Reserve’s special Treasury facilities would expire on 1 February 2010. The ECB
followed the Fed’s lead by letting it be understood after its last meeting of the year that the
exceptional measures taken to prop up the financial system during the crisis would be
gradually phased out in 2010. Finally speculation about monetary policy standardizing
strategies was fanned by the decision taken by other central banks (such as the Central
Bank of Australia and the Central Bank of Norway) to tighten monetary policy. In December
the US dollar appreciated by 4.7% against the euro, to close for the year at 1.4316 USD.
The dollar rose against the yen to 92.32 JPY in October, in the wake of optimism about world
economic recovery that led investors to turn away from the yen as a safe investment. Still,
renewed worries on the market because of concern about certain sovereign risks once again
led to a wave of flight to quality. This helped Japan’s currency, pushing it up to 84.81 JPY at
the end of November, its highest level of the year. But the yen dropped again in December,
as investor fears receded about the financial situation in Dubai. The yen also suffered in
December when the Bank of Japan (BoJ) at its last meeting of the year unexpectedly
announced that measures would be taken to ease monetary conditions, by introducing a
three month cash facility to provide additional liquidity to banks. This decision supported the
thinking that Japanese rates would remain low for a long time, putting additional pressure on
the yen, which closed for the year at 92.90 JPY.
b. Trends in GBP/USD
After a short period of depreciation, the British pound followed an upward trend that propelled
it from a low of 1.3498 USD to more than 1.61 at the end of the year, influenced by a fading
of uncertainty about British banking and better prospects for growth in the United Kingdom.
The pound sterling began the year on a downturn, falling to 1.35 USD after opening at
1.4616 at the beginning of January. This movement was due to ongoing slowing of economic
activity in Great Britain over the first quarter of 2009, with high inflation, a drop in household
expenditure, growing unemployment and tighter lending conditions. The British pound also
suffered from a weak British banking sector, following the announcement of colossal losses
at a number of banks (notably Barclays, Lloyds and The Royal Bank of Scotland) and
downgrading of their ratings, which contributed to fears of downgrading of the British
sovereign rating.



                                               25
                                 TRENDS IN GBP/USD IN 2009

  1.7500                                                                               1.7500



  1.6500                                                                               1.6500



  1.5500                                                                               1.5500



  1.4500                                                                               1.4500



  1.3500                                                                               1.3500
       02-Jan-09               03-May-09                01-Sep-09               31-Dec-09



To avoid a deep, prolonged recession of the British economy, the Bank of England (BoE)
reduced its main key rate by 50 base points each on three occasions in the space of two
months, bringing it to a record low of 0.5% on 5 March. Moreover, the BoE opted for
quantitative easing measures in order to support the economy by increasing money supply,
implementing a plan to buy up assets with initial funding of 75 billion GBP.
Starting the second week of March, the pound sterling started to climb, reaching 1.7042 USD
on 5 August, its highest figure for the year, a gain of more than 26% against the US dollar
compared to its lowest level of the year. This movement was due mainly to weakening of the
dollar over the period under review, against a background of renewed market confidence and
recovery in the global economy.
The pound sterling was also supported by the Bank of England’s decision to increase funding
to GBP 125 billion in May for its programme to buy up assets.
The British currency took advantage of the differential in interest rates, which was slightly in
favour of Great Britain, with Fed fund rates standing at a record low of [0% -0.25%].
Moreover, economic conditions in Great Britain showed some improvement, with lower
inflation, a smaller decrease than expected in GDP over the second quarter (0.6% vs. 0.8%
projected initially), better lending conditions, and recovery on the real estate market. Better
prospects for the British economy contributed to revised assessment that there was less risk
for holding assets labelled in GBP and this led to greater interest in these assets, thus
helping British currency to gain value.
But the trend reversed starting the second week of August. A persistently fragile British
banking system once again affected market sentiment, while the Bank of England decided to
inject additional liquidity by increasing funding to buy up assets to GBP 175 billion, which
was perceived negatively this time by the market. The British currency took a hit following
statements by the President of the Bank of England to the effect that a weak pound was in
the best interests of British exporters and by expectations that key interest rates would
remain low in Great Britain, notably after the results of a study issued by the Centre for
Economic and Business Research (CEBR), which considers that British interest rates will
remain at 0.5% until 2011, not to attain 2% until 2014, while analysts had been counting on
                                              26
an increase in interest rates in the United States and the euro zone starting the second half
of 2010. The British pound thus fell to 1.5705 on 13 October.
Two factors did for a while prop up the British currency, which traded at about 1.68 on
16 November : a report on the BoE meeting attesting to various points of view among
members of the monetary policy council about the outlook for inflation and a further increase
in funding for the quantitative easing programme to GBP 200 billion. But this was of short
duration and by the end of the year the pound had lost the ground previously gained, as the
dollar appreciated. The pound sterling closed for the year at 1.6154, an overall increase of
10.5% compared to the figure at the beginning of 2009.
2. EMERGING COUNTRIES
Despite some resilience in their economies, the main emerging countries were not spared
the adverse effects of the financial and economic crisis in 2009. In effect, the lower volume of
exports and capital outflows contributed to bringing to an end the cycle of strong growth that
these countries had enjoyed since the beginning of the decade.
Still, a massive accumulation of foreign currency reserves (which helped finance policies to
boost domestic demand) acted as a shock absorber for these countries (especially Asian
countries), helping them achieve an overall growth rate that was higher than expected : 6.2%
estimated for 2009 vs. 7.6% in 2008.
The economies of eastern Europe, on the other hand, suffered from the effects of the world
crisis, dropping by some 5% of GDP vs. +3% in 2008.
Despite difficulties in economic activity, the main emerging currencies managed to
appreciate or at least remain stable against the US dollar.
TRENDS IN THE MAIN CURRENCIES OF EMERGING COUNTRIES IN 2009
    Exchange rate                  Closing 2008                Closing 2009   Variation* in %

       USD/CNY                            6.8225                   6.8259          -0.1
       USD/INR                             48.58                    46.40          +4.7
       USD/MYR                              3.45                    3.422          +0.8
       USD/THB                             34.71                    33.34          +4.1
       USD/KRW                            1262.0                   1163.6          +8.5
       USD/PLN                              2.96                     2.86          +3.5
       USD/HUF                            188.30                   187.96          +0.2
       USD/CZK                             19.11                    18.38          +4.0
       USD/RUB                             30.53                   30.311          +0.7
       USD/TRY                             1.540                    1.495          +3.0
       USD/MAD                            8.0121                   7.8765          +1.7
       USD/EGP                            5.4875                   5.4835          +0.1
(*) Variation of the local currency against the dollar.

In China, the recovery plan announced in November 2008 for 4,000 billion yuan (460 billion
euros) helped boost domestic demand and thus offset part of the drop in exports. Thanks to
this budgetary boost, along with conduct of expansionary monetary policy and ongoing
improvement in investment, China succeeded in maintaining a very positive growth rate of
some 8.5%, compared to 9% in 2008.
                                                          27
Moreover, in this context of crisis and considerable drop in exports, the Chinese central
bank made no change in policy for its currency’s rate of exchange, with the yuan trading at
6.8259 to the dollar at the end of 2009 vs. 6.8225 at the end of 2008.
The Indian roupie appreciated against the US dollar, due mainly to strong performance by
India’s economy, which managed to maintain a positive growth rate of some 5.4% in 2009.
This was made possible by its weak dependency on foreign trade and measures taken to
boost consumption, the main motor of Indian growth (60% of GDP).
The other main Asian currencies (the Korean won, the Malaysian ringgit and the Thai
baht) followed the same trend against the dollar. There were two distinct periods. The first
involved depreciation over the first two months of the year. Then a second period began in
March, when these currencies gained back ground against the greenback. This movement
was attributable to the inflow of foreign capital invested in the economies of these countries,
notably because of carry trade transactions on the US dollar.
Contrary to Asian countries, those of central and eastern Europe were fully exposed to
fallout from the world financial and economic crisis because of their high dependency on the
main European countries affected by the crisis, with domestic demand insufficient to take up
the slack and thus maintain the growth rate in effect prior to the crisis. Strong pressure on
foreign exchange and concern about the banking system were the main characteristics of the
zone’s economic and financial climate, notably with investment falling by more than half,
along with a deepening budget deficit and deteriorating debt ratios.
Nevertheless, thanks to their pegging to Europe’s single currency, the currencies of eastern
Europe appreciated for the most part against the dollar, as the euro gained value against the
greenback.
Russia’s economy fell victim to its heavy dependency on raw materials, especially oil and
gas, for which prices dropped considerably after hitting record highs in the summer of 2007.
There was also the issue of its high indebtedness, which was a real liability in light of the loan
crisis. Thus, after +5.6% growth in 2008, GDP in Russia posted -7.5% in 2009.
Russia’s central bank intervened on several occasions to prop up the value of its currency so
as to avoid massive outflows of capital.
B. THE GOLD MARKET
Gold broke new all-time records in 2009, crossing the psychological threshold of $1,200 per
ounce in December, mainly on the strength of its status as a safe investment and a weak
dollar. It rose throughout the year from 879.30 USD/oz to 1,095.70 USD/oz, gaining more
than 24%.
Over the first quarter, after experiencing a drop of 8% the first two weeks of January, on
20 January gold once again crossed the threshold of $1,000 per ounce, taking advantage of
its status as a safe investment. Furthermore, the price of gold was boosted by the fascination
of small holders and institutional funds for gold, further favoured by expansionary monetary
policies that made the cost of financing such acquisitions of little importance.



                                               28
                               TRENDS IN GOLD PRICES IN 2009
  Price in $/ounce
   1,400                                                                                 1,400

   1,250                                                                                 1,250

   1,100                                                                                 1,100

     950                                                                                 950

     800                                                                                 800

     650                                                                                 650
        02-Jan-09               03-May-09                01-Sep-09                31-Dec-09


Still, the price of an ounce of gold went down once again, falling to $882.90 in March, after a
calming of investor aversion to risk because of optimism about a rapid increase in financial
and economic activity on both sides of the Atlantic.
In the second quarter, the price of gold was volatile, fluctuating in a range of between
$900 and $990 per ounce. During the first two months of the quarter, the price of gold shot
up from $917.55 to $980 per ounce, influenced by a weak dollar as well as renewed concern
about the financial sector and about economic recovery throughout the world. Nevertheless,
hopes for stabilisation or even recovery in the world economy based on publication of
economic indicators considered to be positive and renewed activity on the real estate market
and in jobs in the United States led to a new drop in the price per ounce of gold, which
closed for the quarter at $925.85.
Throughout the third quarter, the price of an ounce of gold started out once again on an
upward trend, posting new record highs ($1,023.85 on 17 September 2009), with soaring
prices for oil feeding fears about inflation. A new period of falling value for the US dollar was
advantageous to gold, considered an alternative investment to assets labelled in dollars. The
reasons for this weakening of the dollar were overly accommodating monetary policy on the
part of the Fed and a burgeoning US budget deficit, along with incessant calls by
governments for creation of a new supranational reserve currency that would be more stable
than the greenback.
The rise in gold prices became more pronounced in the fourth quarter, in a context of
ongoing depreciation of the US currency that caused the return of certain central banks to
gold holdings. On 2 November the Central Bank of India announced that it would buy
200 tonnes of gold from the International Monetary Fund. The Central Bank of Sri Lanka
followed the lead by making it known that it had acquired some 5.3 tonnes of gold in
September in the framework of strategic diversification of its reserves. On 16 November, the
IMF announced sale of two tonnes of gold to the Central Bank of Mauritius.
A new outbreak of fears about inflation because of the higher price of a barrel of crude (to
more than $80) along with renewed concern about the performance of the international
financial system against a background of financial difficulties for the Emirate of Dubai
propelled the price of an ounce of gold to a new record high of $1,226.10 on 3 December.
Still, doubts about the end of economic and financial recession and concern about the
budget deficits of euro zone member States contributed to a rebound for the dollar, which
penalized prices for raw materials. Gold closed for the 2009 at $1,095.70.
                                               29
                       III. INTERNATIONAL CAPITAL MARKETS

With a new outbreak of the economic and financial crisis at the end of 2008, international
stock markets experienced greater losses in early 2009, against a background of ongoing
uncertainty about the ability of the world economy to bounce back rapidly and of financial
markets to get back to normal activity. Besides, the appearance of positive economic
indicators showing the first signs of recovery in the world economy and a return of investor
confidence as a result of massive and concerted interventions by governments and central
banks throughout the world at the end of the first quarter helped calm uncertainty throughout
the rest of the year, despite economic and financial difficulties in certain European countries
and the Emirate of Dubai. International bond markets evolved in a different manner, making
the most of their reputation as a safe investment at the beginning of the year, but then
experiencing a downturn as soon as the international financial crisis showed signs of
improvement.
For the year as a whole, international capital markets were marked by the following
circumstances:
1- Stock markets bounced back in mid March, as investor aversion to risk faded after
prevailing throughout a chaotic 2008 year, thanks to measures taken by the main
industrialized countries to prop up monetary and budgetary conditions. In the United States,
the Dow Jones closed on an increase of more than 20%. European stock markets in turn
gained more than 20%, while the main index for the Tokyo Stock Market gained 19%.
Moreover, thanks to stanch resilience by a number of economies in Asia and South America,
the Morgan Stanley Capital Index (MSCI) of emerging stocks shot up by some 75%, while
the MSCI world index rose by 27%.
2- The main sovereign bond markets in industrialised countries posted a counter
performance in 2009. In fact, after having held exceptional attraction at the peak of the crisis
and having taken advantage of their reputation as a safe investment in 2008, they recorded a
considerable drop for the year 2009 as a whole, causing heavy losses for investors. In
comparison to figures at the end of the previous year, ten year bond yields rose as follows:
by 163 base points for US bonds to 3.84%, by 44 base points for European bonds to 3.40%,
and by 13 base points for Japanese bonds to 1.30% for the year.
3- The loan market posted an improvement with return to normal conditions for the interbank
market and world liquidity, especially starting the second half of the year, in line with various
measures (both direct and indirect) taken by governments and central banks, which helped
improve certain sensitive sectors such as banks and automotive industries, giving more
flexibility to companies to raise funds on capital markets.
4- There was gradual improvement in activity on the market for emerging bond issues in
foreign currency, helped by lower risk of default on payment in these countries and greater
tolerance on the part of investors for emerging risk. In these conditions, margins applied on
sovereign bond issues by emerging countries followed a downward trend. Thus the EMBI+
index closed for the year 2009 at 280 base points, a drop of 410 base points compared to the
previous year’s figure.

                                               30
A. STOCK MARKETS
After their collapse in 2008 because of the financial crisis, world stock markets bounced back
in a spectacular manner in 2009. Overall, the MSCI world index went up by 27%.
The past year was marked in particular by economic recovery policies and ultra-
accommodating monetary policies. Central banks succeeded in containing the crisis by
making massive injections of liquidity at extremely low interest rates. At the same time,
budgetary recovery plans helped improve conditions. Thus investors came to believe that
there would be a return to growth sooner than expected and were willing to assume risk in
acquiring stocks.
After fear at the start of the year that the financial crisis and recession could lead to a
depression comparable to that of the 1930s, world markets bounced back in a remarkable
manner. By the end of the first quarter, recession no longer marked stock markets. In effect,
after falling to their lowest levels on 9 March, there was a stunning increase. European and
American markets gained almost 20% over the figure of the beginning of 2009 and 60%
compared to their lowest levels on 9 March, an achievement unparalleled since 1933.
The early impact of recovery plans launched by various governments and measures
implemented to prop up the financial sector began to bear fruit, boosting investor confidence.
Moreover, with access to loans being so difficult, businesses increasingly turned to the stock
market for funding, leading to a greater volume of capital increases, which amounted to
some 10 billion euros in 2009.
Between July and early autumn, strong corporate performance lent support to stock markets.
Still, given the extent of uncertainty about economic recovery in 2010, trends in stock
markets were somewhat mixed until the closing sessions of the year, when investors showed
renewed interest in participating in the traditional yearend rally.
In Europe, stock values for the year as a whole posted the best figures since 1999, led by
high mining prices driven by rising quotes for raw materials. The pan-European index Euro
First 300 closed for 2009 on an increase of 25.69%.
The Paris Stock Market closed at the end of 2009 on an annual gain of 22.3%, after a record
loss of almost 43% in 2008, with investors’ return back to risky assets as the first signs of an
end to recession appeared in the second quarter. This was the best annual performance in
the index since 2005 (+23.4%). Over the first three months of the year, the Paris Stock
Market plunged by 23%, to 2,465.46 points on 9 March 2009, falling to the levels of March
2003 just after the internet bubble burst. The CAC 40 then climbed back, soaring by 60%, on
the strength of higher value for bank and automotive stocks.
But although the overall index was higher, there were variations from one sector to another.
The automotive branch (including parts manufacturers) recorded an increase of more than
75%, boosted by a very favourable base effect and by premiums for phasing out old vehicles,
and this had a sustained impact in stimulating the market. Bank stocks also gained almost
70% in value. On the other hand, telecommunications stocks went up very little.
The key index on the London Stock Market closed for 2009 on an upturn of 22.1%, its best
annual performance since 1997, influenced by major banks and mining stocks, two sectors
                                              31
that had a major impact on trends for this index. From its lowest level, attained in March, the
Financial Times Stock Exchange Index (FTSE 100) rose by 56.4%, despite the fact that the
British market was burdened with an economy that was more fragile than that of other
wealthy countries. In effect, the United Kingdom’s economy showed no signs that the
recession was coming to an end in late 2009, contrary to what was happening in most of the
other developed countries.
The Madrid Stock Market’s key index fell from 9,195 points on 2 January 2009 to
6,817 points on 9 March, but it then bounced back considerably, climbing by more than 77%
to 12,070 points on 28 December. Various warnings by rating agencies about Spain’s
economic situation brought about a slight adjustment on the market and the IBEX 35 index
closed for the year at 11,940 points.
The Frankfurt Stock Market index posted an increase of almost 24% for the year and of 66%
compared to its lowest level in March.

                    TRENDS IN CAC 40 AND NASDAQ COMPOSITE INDEXES IN 2009
           4,000                                                                            2,500

           3,800                                                                            2,300

           3,600                                                                            2,100




                                                                                                    NASDAQ COMPOSITE
           3,400                                                                            1,900
  CAC 40




           3,200                                                                            1,700

           3,000                                                                            1,500

           2,800                                                                            1,300

           2,600                                                                            1,100

           2,400                                                                            900
             02/01/2009   08/03/2009    12/05/2009   16/07/2009   19/09/2009   23/11/2009

                                       CAC 40         NASDAQ COMPOSITE

In 2009 American stock markets posted their best performance since 2003, on the strength
of higher hopes as the economy recovered. The main motors for higher stock prices in 2009
were extremely low interest rates and the appearance of signs that the economic situation
was stabilising.
The S&P-500 index went up by 23.5% for the year as a whole. The Dow Jones gained 18.8%
and the Nasdaq Composite 43.9%. This performance was the result of nine months of rising
stock market prices, led by technological values and groups of raw materials, with promising
prospects based on economic recovery, a subsequent increase in investment expenditure,
and renewed demand for energy, metals, and raw materials. The three most important
indexes posted the following increases at yearend compared to their lowest levels in March:
the S&P-500 67%, the Dow Jones 61.2% and the Nasdaq Composite 79.3%.
One of the notable components of the rise in 2009 of the US Standard & Poor's 500 index is
the absence of major banks in the top 10. Financial values, which prior to the crisis were the
most important category in the index, have now been replaced by technological stocks.
                                                     32
                                TRENDS IN NIKKEI-225 AND DOW JONES IN 2009
                                                                                                    11,000

               10,500
                                                                                                    10,000

                9,500
                                                                                                    9,000




                                                                                                             DOW JONES
  NIKKEI-225




                8,500
                                                                                                    8,000


                7,500                                                                               7,000



                6,500                                                                               6,000
                  02/01/2009   08/03/2009   12/05/2009    16/07/2009   19/09/2009    23/11/2009

                                            NIKKEI-225              DOW JONES

In Asia, the Tokyo Stock Market closed for 2009 on an increase of 19%, led by technological
values helped by a weaker yen, perceived by players as a boost for Japanese exports, and
by recovery measures launched by various governments. As was the case for other stock
markets, the Japanese index recorded its lowest level in March, then recovered some 50%.
Export listings in high technology were the major category contributing to recovery on the
Tokyo Stock Market in 2009. On the other hand, bank stocks remained sluggish because of
uncertainty about financing for businesses.
Stock markets in emerging countries showed their best annual performance. The MSCI world
index of emerging stocks went up by 74% in 2009. Investors showed great interest in these
markets, convinced that emerging countries would leave the crisis behind more quickly. The
key index for the Indian Stock Market (the Sensex 30 Index) rose by 81%, the Bovespa index
for the Brazilian Stock Market by 83%, and the Merval index for the Argentinian Stock Market
by 115%.
TRENDS IN MAIN STOCK INDEXES
  Financial                                                                                       Variation
   centre            Index                               31/12/08              31/12/09             in %
 Paris             CAC-40                                3,218.0                3,936.33            22.3
 Frankfort          DAX-30                               4,810.2                5,957.43            23.8
 London           FTSE-100                               4,434.2                5,412.88            22.1
 New York        DOW JONES                               8,776.4               10,428.05            18.8
 New York      Nasdaq composite                          1,577.0                2,269.15            43.9
 Tokyo            NIKKEI-225                             8,859.6               10,546.44            19.0

B. BOND MARKETS
After a sharp downturn in 2008, sovereign bond yields followed two different trends in 2009.
Over the first half of the year, bond yields went up sharply, in line with better performance by
stock markets in the second quarter and investor concern about growing budget deficits in
the main industrialised countries. There was then a relatively fragile lull over the second half
of the year.
                                                         33
For the first half of the year, influenced by growing expectations of inflation along with
investor concern about the sustainability of the USA’s debt, the 10 year US reference yield
rate began the year on an upturn that reached 3% at the end of February, an increase of
79 base points over the end-2008 figure. This period of sharp correction was temporarily
interrupted after the Fed announced adoption of a non conventional monetary policy,
earmarking an envelope of USD 300 million to buy back sovereign bonds in an attempt to
lower the overall level of rates. In effect, the 10 year US bond yield dropped to 2.54% on
18 March.
Starting on that date, yields began to rise, lasting until the first half of June, influenced in
particular by coordinated action by governments at the G20 summit in April, which in turn
encouraged investors to turn away from sovereign debt securities to other more profitable
holdings. Thus ten year US yields came to 3.95% on 10 June, marking the high point of the
year and the highest level since the end of October 2008.
Like 10 year American rates, European bond yields rose by 45 base points in January to
3.4%, following downgrading of the sovereign ratings for Portugal, Spain and Greece by the
Standard and Poors agency (S & P). The rise of bond rates varied from one sovereign issuer
to another, since 10 year Spanish and Portugese sovereign yields picked up 64 and 78 base
points respectively in January. Contrary to US rates, European two year yields lost some
57 base points between early January and 17 February, falling to 1.17%, as anticipation
grew that the ECB would lower its key rate.
The 10 year European reference yield was highly volatile between mid February and mid
March, due to the ECB’s wait-and-see attitude about the monetary policy to be adopted,
before following the trend of 10 year US bonds in a decisive move, marking a peak for the
year of 3.71% on 5 June, an increase of 71 base points compared to the end-March figure, in
line with growing concern about deteriorating public finances in certain Eastern European
countries and S & P move on 22 May to downgrade the United Kingdom’s sovereign debt
rating from stable to negative.
Despite investor enthusiasm for short-term maturities, the European 2 year bond yield rose
between mid February and end March by 7 base points to 1.24% because of expectations of
stability in key rates by the main central banks, which hit record lows before moving to
1.42% on 8 June.
In Japan, 10 year yields also experienced a period of sharp tension over the first half of the
year, in line with the announcement in February by the Bank of Japan (BoJ) of its intention to
devote up to 1,000 billion yen (8.7 billion euros) for buy-back of stock held by Japanese
banks in order to ease their balance sheets. The 10 year Japanese reference yield gained
14 base points between early January and the first week of February, rising to 1.34%, then to
more than 1.50% on 10 June.
There was a relative lull in bond yields over the second half of the year, although there were
chequered trends for US 10 year yields following episodes of stock market drops and
publication over the second half of August of a pessimistic report on jobs in the USA,
sustaining doubts about the pace of recovery, which lead to a drop in the 10 year US yield to
3.40% at the end of August.
                                              34
Trends in the 10 year euro zone reference yield were less volatile than that of the US yield
for the same maturity. In effect, the 10 year euro rate yield closed for the third quarter of the
year down by some 16 base points to 3.22%, while the 2 year euro rate yield hit its lowest
level of the year at 1.09%, approaching the ECB’s key rate (set at 1%), reflecting investor
perception that loan conditions in the euro zone would remain at their record level for a long
time.
Over the last quarter of the year, yields suffered from renewed inflationary fears, following
publication of certain figures indicating an improvement in economic conditions and
questions about strategies for dealing with the crisis at European central banks. In effect,
after dropping to 3.18% at the beginning of October, the US yield for 10 year bonds gained
almost 32 base points, posting 3.50% at the end of the month, compared to 8 base points for
the European yield of the same maturity. Statements by the US president in mid November
to the effect that economic expansion was not as strong as expected, that federal rates
would be maintained at exceptionally low levels, and that there was indeed concern about
financial problems in the Emirate of Dubai brought about renewed aversion to risk and a drop
in November in 10 year US and European reference yields by some 25 and 10 base points
respectively.
As expectations of higher interest rates grew following publication in mid December of
November’s US industrial production figures (up by 0.8%) and production prices in the United
States that were better than expected, the ten year US reference yield closed for the year at
3.84%, up by 163 base points compared to its level at the beginning of the year. The euro
zone bond market also experienced sharp correction, impacted by the US market and
investor concern about further deterioration of the debt situation in Greece and Spain, closing
for the year at 3.40%, an increase of 45 base points over the figure at the beginning of the
year.
Still suffering from the deflationary pressure that continued to weigh on the Japanese
economy, the yield for 10 year Japanese bonds moved over the second half of the year in a
range of between 1.23% and 1.47%, to close for 2009 on a slight increase of 13 base points,
in a context of soft recovery in activity and maintenance of short-term loans at near zero.

                      TRENDS IN 10 YEAR BOND YIELDS IN 2009 ( In %)
   4.5

   4.0                                                                   US10YT

   3.5

   3.0

   2.5                                                                   EU10YT

   2.0

   1.5

   1.0                                                                   JP10YT

   0.5
   30/12/2008   28/02/2009    29/04/2009   28/06/2009    27/08/2009   26/10/2009   25/12/2009


                                               35
As for emerging countries, margins applied on issues both on primary and secondary
markets tightened starting at the beginning of the year, effected by higher confidence
following announcement by US officials of a plan to buy up bad assets, the strong surge in
stock markets, and good performance by emerging economies, notably countries that are net
exporters of merchandise that benefited from higher foreign demand for commodities. Aside
from short episodes of pressure related to doubts about the sustainability of the budget
deficit in certain emerging economies (especially after downward revision of ratings for
certain Eastern European economies), margins applied to international sovereign issues on
the secondary market went down, as reflected in the EMBI+ index, which closed for 2009 at
280 base points, falling by a considerable 412 base points from the figure posted at the end
of the previous year.
TREND IN 10 YEAR YIELDS FOR THE MAIN CURRENCIES
 Currencies               Closure 2008           Closure 2009       Variation (base points)

      Dollar                    2.21                  3.84                    +163
      Euro                      2.95                  3.40                     +45
      Yen                       1.17                  1.30                     +13




                                            36
                              IV. WORLD COMMODITIES MARKET

After having posted a considerable drop between the summer of 2008 and the month of March
2009 because of recession in the world economy, prices for most commodities began to
gradually rise, especially in the second half of the year. This increase was made possible by
recovery in industrialised countries and ongoing vigorous economic expansion in a number of
emerging countries such as China and India. Signs of recovery in the world economy led to
growing international demand and recovery in world commodity prices, especially for oil and
industrial raw materials.
Despite this increase, the overall commodities price index, labelled in dollars and as
established by the International Monetary Fund, posted a considerable 31% drop in 2009 after
increasing by 27.5% in 2008. The sharpest drop was in energy products (-36.9% vs. +40.1% a
year earlier) and metals (-28.6% vs. -8%), while food prices went down at a slower pace
(-14.7% vs. +23.3%). Exclusive of energy, the drop in commodity prices came to 18.7% vs. an
increase of 7.5% a year earlier.

                            TRENDS IN COMMODITY PRICE INDEX (In %)

     35                                                                                              35
     30                                                                                              30
     25                                                                                              25
     20                                                                                              20
     15                                                                                              15
     10                                                                                              10
      5                                                                                              5
      0                                                                                              0
     -5                                                                                              -5
    -10                                                                                              -10
    -15                                                                                              -15
    -20                                                                                              -20
    -25                                                                                              -25
    -30                                                                                              -30
    -35                                                                                              -35
      2005                  2006                     2007              2008                     2009

             Global index          Global index exclusive of energy   Agricultural commodity index



A. FOODSTUFFS
World food prices in 2009 posted sharp decreases, except for sugar, tea and cocoa, for which
prices went up. The drop was due to the existence of stocks of certain products (especially
cereals) and better harvests for other products thanks to a larger area of cultivated land.
Furthermore, the threats to food security that had appeared in 2008 faded, which encouraged
producing countries to reduce or even eliminate prohibitions and other export restrictions
introduced the year before.
As for cereals, world production in 2009 came to about 2,462 million tonnes, a drop of nearly
2% from 2008’s record high. This slight drop concerned both developed countries and
emerging/developing countries, mainly because of adverse weather such as drought that
affected harvests (mainly barley, corn and rice) in certain producing countries, especially
Argentina.
                                                      37
TRENDS IN CEREAL WORLD PRODUCTION                                                         (In millions of tonnes)
                                                                                         Variation in %
         Description                   2007            2008            2009
                                                                                    2008/2007       2009/2008
 Total                                2,365.3      2,509.5            2,462.3          6.1            -1.9
    - Wheat                             625.5        681.4              678.6          8.9            -0.4
    - Secondary cereals               1,082.4      1,143.1            1,108.7          5.6            -3.0
      of which : *Corn                  793.0        819.6              805.2          3.4            -1.8
                 *Barley                134.4        153.0              146.2         13.8            -4.4
    - Rice                              657.4        685.0              675.0          4.2            -1.5
                                                               Source : Food and Agriculture Organisation (FAO)

World production of wheat more or less stagnated (-0.4%) at 2008 levels to almost
679 million tonnes. By region, higher production in Asia and good harvests in North Africa
contrasted with a drop in North America despite yields that were higher than world averages,
as well as in Russia, the Ukraine, the European Union and South America.
In this context, international wheat prices in 2009 were down sharply by 31.6% from the
previous year’s figure, compared to an increase of 27.8% in 2008. This was attributable to
prospects for good harvests in 2010, abundant quantities for export, and higher production
levels in a number of countries such as Iran, Pakistan, India and China, in a context of falling
international demand. This situation brought about a drop in prices to below $200 per tonne
in September and October 2009, compared to $296 and $237 per tonne respectively in the
same months in 2008.

                           MONTHLY TRENDS IN WORLD WHEAT PRICES
                                       (In USD/Tonne)
  460                                                                                                     460

  420                                                                                                     420

  380                                                                                                     380
                                                                   2008
  340                                                                                                     340

  300                                                                                                     300

  260                                                                                                     260
                                                                   2009
  220                                                                                                     220

  180                                                                                                     180
        Jan.   Feb.    March   Apr.     May     June        July   August   Sept.   Oct.   Nov.    Dec.



World production of secondary cereals went down by 3% in 2009 (after rising by 5.6% a year
earlier) to about 1,109 million tonnes. In particular lower production of corn (the main crop in
some regions) was not offset by higher harvests in the United States and southern Africa.
Despite this situation, corn prices went down by a sizeable 25.6% on average, following
2008’s 36.8% increase. Still, some recovery in these prices was observed in the closing
months of 2009, influenced in particular by the emergence of pressure on supply and
demand for the main secondary cereals. Thus prices went up by 4.4% between end 2008
and end 2009 to $165 per tonne.
World production of barley fell by more than 4% in 2009 after a net increase of 13.8% in
2008, following a significantly smaller harvest in North America and Europe that was only
                                                       38
partially offset by higher production in other regions such as the Near East and North Africa.
Nevertheless, international prices for barley dropped by a sharp 36% on average, following
the previous year’s 16.3% increase.
World production of rice, the principal food staple produced and consumed in Asia, posted a
slight 1.5% decrease to 675 million tonnes. This drop was due mainly to a 15% smaller
harvest in India because of late rains in the main production regions of the country. Still, the
world market for rice was marked by abundant quantities of rice available for export,
especially in Thailand and Vietnam. This was reflected in a 15.9% drop in international prices
throughout 2009, after having more than doubled the year before, coming to $589 per tonne
on average. These prices rose toward the end of the year, posting an increase in December
that was 10% more than in December 2008, coming to $606 per tonne. This recovery was
attributable to fears of shortages, despite massive imports from the Philippines and the
announcement of probable imports from India.
As for fats and oils, world production of oil went up by 5.2% in 2009 (compared to 2.6% the
year before), coming to 168 million tonnes. This increase involved production of palm oil
(6.1% vs. 9.9% in 2008), which represents about 26% of world production as well as
rapeseed oil (11.5% vs. 7.6%). Despite higher production, world prices for vegetable oil went
up in the closing months of 2009 as international demand went up while remaining in terms
of averages for the year considerably below levels recorded in 2008.
After having declined in the last five months of 2008, palm oil prices gradually rose from
$522 per tonne in January 2009 to $728 in December of the same year. Despite a sharp
increase of some 65% between end 2008 and end 2009, prices for this product fell by 25.4%
on average after increasing by 20% in 2008.
Prices for soybean oil followed practically the same trend as palm oil. Although still
significantly below 2008’s record levels, international prices for this product went up for the
most part, notably because of lower production and lower availability for export, especially in
the three main producing countries (Argentina, Brazil and the United States). These
countries reserved a significant portion of production for local consumption and building up of
stocks, which caused pressure on world supply and stagnation in international trade in
soybean oil. Thus prices went up by 27.3% between end 2008 and end 2009 to post
$867 per tonne in December 2009. But in terms of annual average, prices went down by
30.6% (compared to 2008’s strong increase of 41.8%) because of falling prices until the fall
of 2009, compared to the previous year’s levels.
TRENDS IN VEGETABLE FATS WORLD PRODUCTION                                                    (In millions of tonnes)
                                                                                        Variation in %
          Description                   2007           2008             2009
                                                                                    2008/2007    2009/2008
 Total                                  155.6          159.7            168.0             2.6               5.2
 of which :
 - Soybean oil                           36.4           37.5            35.9               3.0            -4.3
 - Palm oil                              37.2           40.9            43.4               9.9             6.1
 - Rapeseed oil                          17.0           18.3            20.4               7.6            11.5
 - Olive oil                              2.8             2.7            2.7              -3.6             0.0
Sources : Food and Agriculture Organisation (FAO), United States department of agriculture (USDA) and international
olive oil Council

                                                        39
World groundnut oil prices, starting in August 2008 and practically throughout the year,
continued to go down. There was a drop of 17% between end 2008 and end 2009 to reach
$1,192 per tonne vs. the record high of $2,536 in July 2008. In terms of average, the drop was
greater, posting 44.4% in 2009 vs. an increase of 57.6% the year before.
Olive oil world prices began to fall starting April 2008 and this continued until the spring of
2009, influenced by slowing international demand, especially in a Europe hard hit by economic
recession. This was illustrated in particular by low growth in exports by Spain (0.7% in 2009),
the leading world exporter of olive oil, and by virtual stagnation in consumption around the
world.
Consequently, despite recovery starting in June 2009, olive oil prices posted a considerable
drop in 2009 to an average of $3,509 per tonne (-15.8% vs. -8.6% in 2008). This 14.8%
increase in prices between end 2008 and end 2009 was due to renewed demand following
better prospects for the world economy. Still, the level of prices at the end of 2009 was some
34% lower than the record high posted in May 2006 : $3,851 and $5,854 per tonne
respectively.
Sugar world prices grew at a considerably faster pace in 2009, closing for the year at +63.9%
(vs. 7.8% a year earlier) to $408 per tonne in December. In terms of average however, the
increase was lower than in 2008, at 19.3% vs. 24.5%. This situation was due mainly to a
record drop in world production, notably in the two main producing countries of Brazil and
India. This was due to adverse weather (high rainfall in Brazil and extreme drought in India),
which brought about lower yields and thus lower production. Furthermore, there was sustained
international demand, especially from India (which became a net importer after exporting sugar
for several years) and Brazil (where some 60% of sugar was used for production of ethanol).
After decline that began in September 2008 because of flat demand, world coffee prices went
up gradually in 2009, especially from August on, to close for the year at $2,893 per tonne, 37.8%
more than in December 2008. Still, for 2009 as a whole, coffee prices went down by 9% after an
increase of 10.5% a year earlier. Higher prices were due mainly to short supply on the coffee
market because of lower world production but also because of forecasts of lower production for
the 2009-2010 season, especially in Brazil and Vietnam, the leading world producers.
AVERAGE PRICES OF FOODSTUFFS                                                       (In dollars per tonne)
                                      Averages for December               Annual averages
                                                      Variat.                          Variat.
 Products     Places of quotation
                                      2008   2009   2009/2008        2008    2009    2009/2008
                                                       in %                             in %
Wheat        Gulf Ports U.S.           220      206      -6.4          326        223          -31.6
Corn         Gulf Ports U.S.           158      165       4.4          223        166          -25.6
Rice         Thailand                  551      606      10.0          700        589          -15.9
Oil :
.Soybean     Dutch Ports               681      867       27.3        1,134       787         -30.6
.Palm        Malaysia/North Europe     440      728       65.5          863       644         -25.4
.Groundnut   Europe                  1,436    1,192      -17.0        2,131     1,184         -44.4
.Olive       United Kingdom          3,355    3,851       14.8        4,167     3,509         -15.8
Sugar        Brazil                    249      408       63.9          274       327          19.3
Coffee       New York                2,099    2,893       37.8        2,698     2,455           -9.0
Cocoa        London & New York       2,420    3,518       45.4        2,573     2,895          12.5
Tea          London                  2,285    3,742       63.8        2,695     3,140          16.5
                                                           Source : IMF International Financial Statistics

                                               40
Tea prices went up steadily in 2009, in line with robust international demand and lower supply
in the wake of drought that prevailed in India, Kenya and Sri Lanka. Thus world tea prices went
up by a sizeable 63.8% between the end of 2008 and the end of 2009 to a record high of
$3,742 per tonne. Throughout the year, there was an increase of 16.5% (vs. 27.2% in 2008) to
an average price of $3,140 per tonne.
Price trends for cocoa in 2009 were strongly influenced by insufficient supply in a context of
sustained international demand for the third straight year. Thus world cocoa prices continued to
rise significantly in 2009, boosted by speculation and growing uncertainty about the expected
level of production in the 2009-2010 campaign, especially with adverse weather causing some
15% drop in production in the Ivory Coast. Thus prices posted a 45.4% increase between the
end of 2008 and the end of 2009 to $3,518 per tonne. In terms of average however, prices
rose more slowly, by 12.5% in 2009 vs. 31.4% in 2008.
B. INDUSTRIAL RAW MATERIALS
World prices for industrial raw materials in 2009 fell fairly sharply from record highs in 2007 and
2008, despite recovery that began in March and April for all products except phosphates. With
better economic prospects in industrialised countries, world demand began to gradually
recover, bringing about price increases virtually across the board. To this should be added
strong demand from emerging Asian countries, affected in particular by reconstitution of stocks
in China, the leading world consumer of metal. Furthermore, supply of a number of minerals
and metals was disrupted by lower production at a time of falling prices and tougher conditions
on the scrap metal market as well as growing strikes in a number of producing countries.
For cotton, international prices went down by 12.1% on average in 2009, compared to a 12.8%
increase a year earlier, coming to 1,383 dollars per tonne and reflecting the impact of economic
recession in industrialised countries and the resulting drop in demand. Still, prices for this product
went up starting in April and especially over the last quarter of 2009, to $1,693 per tonne in
December, 38.3% above the figure posted in December 2008. This was due in particular to
renewed international demand, vigorous economic growth in China, a weak US dollar, and
growing speculation. World production of cotton in 2009 suffered a drop of more than 10%,
affecting in particular the United States (which provides some 45% of world exports) as well as
China, India and Turkey, where producing regions suffered from adverse weather.
AVERAGE INDUSTRIAL RAW MATERIAL PRICES                                               (In dollars per tonne)
                             Averages for December                         Annual averages
                Places of                     Variation                                 Variation
   Products
               quotation   2008      2009    2009/2008                2008     2009    2009/2008
                                                in %                                      in %
Cotton         Liverpool   1,224     1,693        38.3                  1,574       1,383         -12.1
Natural rubber Singapore   1,250     2,810      124.8                   2,614       1,922         -26.5
Copper         London      3,105     6,977      124.7                   6,964       5,165         -25.8
Tin            London     11,292    15,589        38.1                 18,467      13,603         -26.3
Zinc           London      1,113     2,374      113.3                   1,885       1,658         -12.0
Lead           London        968     2,326      140.3                   2,093       1,719         -17.9
Phosphate      Casablanca    350        90       -74.3                    346         122         -64.7
                                                             Source : IMF International Financial Statistics

World prices for natural rubber were influenced by falling demand starting in August 2008 and
lasting throughout the first quarter of 2009. They then rose to $2,810 per tonne in December
                                                 41
2009, an increase of 124.8% over the December 2008 figure. Such recovery was due in
particular to vigorous demand from China, in line with sound performance by its automotive
industries as well as lower supply from the three main producing countries (Indonesia,
Malaysia and Thailand).
International prices for base metals were affected in 2009 by world economic recession,
posting a net drop compared to the previous year’s levels. This drop would have been greater
if it had not been for higher imports by China following introduction of a wide-ranging economic
recovery plan that focused mainly on public investment in infrastructure.
The drop in world copper prices for 2009 as a whole came to 25.8% (compared to a drop of
just 2.4% a year earlier), despite the significant recovery recorded starting in June, which
brought the level of these prices to $6,977 per tonne in December. Renewed growth was
attributable in particular to imports by China that reached a record high in 2009, gradual
recovery in demand from Europe and North America, and the threat of strikes at mining sites in
Chile, which provides 35% of world production.

                         MONTHLY TRENDS IN WORLD COPPER PRICES
                                     (In USD/Tonne)
  9,000                                                                                               9,000


  8,000                                                                                               8,000
                                                         2008
  7,000                                                                                               7,000


  6,000                                                                                               6,000


  5,000                                                                                               5,000
                                                     2009

  4,000                                                                                               4,000


  3,000                                                                                               3,000
          Jan.   Feb.   March   Apr.   May   June        July   August   Sept.   Oct.   Nov.   Dec.



World tin production went up by 2.7% in 2009 to 307,000 tonnes. In a context of economic
recession in industrialised countries, this meant a considerable drop in international prices for
this metal (-26.3% on average) vs. an increase of 27.4% in 2008. Still, prices rose after the first
quarter of 2009, in line with gradual recovery in the world economy, coming to $15,589 per
tonne in December, an increase of 38.1% over the December 2008 figure.
Zinc prices also went down (by 12%) in 2009, following a 42% drop the year before, to an
average of $1,658 per tonne in the wake of a 5.6% drop in world consumption. Still, gradual
recovery in international economic activity starting the third quarter of 2009 and 6% higher
consumption in India and even more so in China (+17%), where demand was boosted by
public investment, contributed to higher world zinc prices. In effect, these prices started to go
up starting in March 2009, reaching $2,374 per tonne in December, an increase of 113.3%
over the December 2008 figure, compared to a drop of 53.2% a year earlier.
International lead prices also continued to drop in 2009 (-17.9% on average vs. -18.8% the
year before), in line with higher world production of this metal which is widely used in
                                                    42
construction and in the manufacture of batteries for the automotive sector, affected by difficult
international conditions. With world demand on the rise, prices for this metal started to go up in
March 2009 and especially in the closing months of the year, coming to $2,326 per tonne in
December (+140.3% compared to the December 2008 figure).
After having reached record highs a year earlier, world prices for lime phosphate fell in 2009 to
an average of $122 per tonne, compared to $346 a year earlier. From end 2008 to end 2009
there was a drop of 74.3%, compared to an increase of 159.3% a year earlier, influenced by
prices that remained stable at $90 per tonne starting July 2009, compared to a record high of
$430 per tonne in August and September 2008. There was the same trend in prices for
phosphate-based products (notably DAP and triple super-phosphate) because of lower
international demand, quite aside from the high level of stocks for both raw phosphates and
phosphate-based products, due to high production capacity.
C. CRUDE OIL
Trends in international crude oil prices were marked in 2009 by a drop at the start of the
year, followed by gradual recovery along with sharp fluctuations reflecting the persistence of
pressure on the world oil market. Overall, the average price for a barrel of Brent (the North
Sea crude of reference) fell in 2009 by 36.7% on average (compared to an increase of 34.3%
in 2008 to $61.86). The same trend held for the light sweet crude : -38.1% vs. +37.8% in 2008.
TRENDS IN CRUDE OIL PRICES ON INTERNATIONAL MARKETS
                                                                                      (In dollars the barrel)
                                                                                     Variation in %
    Description         2005     2006       2007       2008           2009
                                                                                 2008/2007 2009/2008
 Brent                  54.44    65.39      72.71      97.66          61.86         34.3          -36.7
 Light sweet crude      56.44    66.05      72.29      99.59      61.69          37.8          -38.1
                                                           Source : IMF International Financial Statistics

Higher oil prices, especially starting in May 2009, was due to increasing signs of recovery in
the world economy and vigorous demand from the emerging countries of Asia, combined
with a reduction in the share of OPEC countries, persistent geopolitical pressure and a falling
exchange rate for the US dollar against the main foreign currencies, particularly the euro.
Thus a barrel of Brent cost $74.67 in December 2009 vs. $41.58 a year earlier, up by some
80% compared to the previous year’s drop of 54.6%.
TRENDS IN WORLD SUPPLY AND DEMAND FOR CRUDE OIL                          (In millions of barrels per day)

          Description                                                              Variation in %
                                    2007        2008           2009
                                                                              2008/2007     2009/2008
 Oil supply                          85.5       86.4         84.9             1.1               -1.7
   OPEC                              34.6       35.6         33.4             2.9               -6.2
   Outside OPEC                      50.9       50.8         51.5            -0.2                1.4
 Oil demand                          86.5       86.2         85.0            -0.3               -1.4
   OECD                              49.2       47.6         45.5            -3.3               -4.4
   Outside OECD                      37.3       38.6         39.5             3.5                2.3
 Difference : supply - demand        -1.0        0.2         -0.1
                                                         Source : “Le Pétrole et le gaz arabes” Magazine

The world oil market throughout 2009 posted virtual balance between supply and demand,
with an increase in supply outside OPEC (+1.4% vs. -0.2% in 2008) and in demand outside

                                               43
OECD (+2.3% vs. +3.5%). The greater weight of countries outside OPEC in world oil
production came to 60.7% in 2009 vs. 58.8% the year before.

            MONTHLY TRENDS IN THE PRICE OF BRENT ON WORLD OIL MARKET
                                (In USD per barrel)

  140                                                                                                140



  120                                                                                                120
                                            2008

  100                                                                                                100



   80                                                                                                80



   60                                                                                                60
                                            2009

   40                                                                                                40
         Jan.   Feb.   March   Apr.   May   June        July   August   Sept.   Oct.   Nov.   Dec.



D. IMPACT OF PRICE TRENDS FOR THE MAIN COMMODITIES ON TUNISIA’S TRADE
BALANCE
Tunisia’s trade balance for 2009 was affected to a certain degree by price trends for the main
commodities traded abroad. In effect, on the basis of a sampling of products representing
some 26% of overall exports and 27% of imports, price trends on the international market
had a negative net impact on the trade balance of some 391 MTD or 6.1% of the deficit
effectively recorded in 2009.
As for exports, the drop in income (-3,760.1 MTD) was a result of the drop in prices
expressed in dinars for virtually all products in the sampling, especially olive oil, energy
products and phosphates/phosphate-based products.
Savings in expenditure for imports were lower than loss of earnings from exports, at -3,369 MTD.
This was due mainly to falling prices for cereals, vegetable oil, energy products, inputs for
phosphate processing industries (especially non refined sulphur), cast iron/iron/steel, and
plastics/items made of plastic. On the other hand, import prices went up for certain products
such as sugar, raw tobacco, and aluminium/items made of aluminium, but with a negative
effect on the balance of the trade balance (kept overall under control).
It should be noted that contrary to 2008, when there was a sharp increase in world prices up
until the summer, the negative impact of energy on the trade balance in 2009 was limited to
an amount of 8.6 MTD vs. an adverse effect of some 196 MTD the year before.




                                                   44
IMPACT OF PRICE TRENDS FOR THE MAIN COMMODITIES ON TUNISIA’S BALANCE OF TRADE
                                (Quantities in thousands of tonnes ; prices in dinars per tonne)
                           2008                         2009                     Variation
                   Unit Quan- Value in        Unit     Quan- Value in         Unit     Impact
                   price  tity    MTD1        price     tity     MTD1         price    in MTD
Exports                                         8,388.0                           5,077.7                -3,760.1
 Olive oil                 4,489   169.1          759.1      3,764      141.7       533.4        -725      -102.7
 Seafood                  11,880    20.0          237.6     11,160       16.3       181.9        -720       -11.7
 Dates                     3,010    69.5          209.2      3,075       77.3       237.7          65         5.0
 Cereal flours               453    12.8            5.8        517        2.9         1.5          64         0.2
 Crude oil                   936 3,438.2        3,218.8        593    3,531.6     2,093.3        -343    -1,211.3
 Refined oil products        941   914.7          861.1        598      910.7       544.4        -343      -312.4
 Lime phosphate              205   879.1          180.5        112      490.9        54.9         -93       -45.7
 Triple superphosphate     1,027   746.6          767.0        440      859.1       377.6        -587      -504.3
 DAP                       1,224   877.7        1,074.3        443    1,134.2       502.2        -781      -885.8
 Phosphoric acid           1,341   661.6          887.2        501      834.9       418.0        -840      -701.3
 Cement                      112 1,668.6          187.4        121    1,094.8       132.8           9         9.9
Imports                                        12,152.1                           7,003.0                -3,369.0
 Dairy milk                3,299    24.1           79.5      3,020       14.7        44.4        -279        -4.1
 Meat                      5,212     5.2           27.1      5,164        5.5        28.4         -48        -0.3
 Hard wheat                  722   658.8          475.5        463      433.9       200.7        -259      -112.4
 Soft wheat                  468 1,107.9          518.9        292      798.6       232.9        -176      -140.6
 Corn                        364   749.2          272.5        257      664.5       170.9        -107       -71.1
 Barley                      381   509.8          194.3        242       65.6        15.9        -139        -9.1
 Coffee                    3,112    16.9           52.6      2,517       14.5        36.5        -595        -8.6
 Tea                       2,288    10.4           23.8      2,469        9.8        24.2         181         1.8
 Sugar                       500   324.3          162.3        609      302.3       184.1         109        33.0
 Vegetable oil2            1,555   360.4          560.6      1,096      268.0       293.6        -459      -123.0
 Crude oil                   931 1,234.7        1,149.4        611    1,106.0       676.2        -320      -353.9
 LPG                       1,040   338.8          352.5        674      355.0       239.1        -366      -129.9
 Fuel oil                    609   725.3          441.8        432      549.5       237.2        -177       -97.3
 Gas oil                   1,166 1,320.1        1,539.3        693    1,160.2       803.8        -473      -548.8
 Kerosene                  1,292   275.7          356.2        817      180.0       147.1        -475       -85.5
 Petrol                    1,128   285.2          321.8        773      301.6       233.1        -355      -107.1
 Other oil products        1,517    47.4           71.9      1,047       29.7        31.1        -470       -14.0
 Natural gas                 540 1,244.1          672.3        378    1,102.2       416.3        -162      -178.6
 Non-refined sulphur         648 1,775.8        1,150.2        106    1,536.4       163.5        -542      -832.7
 Ammonia                     769   276.2          212.4        380      326.7       124.1        -389      -127.1
 Bulk cotton               2,098    13.3           27.9      1,867        7.5        14.0        -231        -1.7
 Paper pulp                  905    92.4           83.6        793       68.7        54.5        -112        -7.7
 Natural rubber            3,410    13.9           47.4      3,079       15.1        46.5        -331        -5.0
 Raw tobacco               4,115     8.7           35.8      5,528       14.2        78.5       1,413        20.1
 Plastic worked products   3,513   359.5        1,263.0      3,217      372.1     1,197.1        -296      -110.1
 Cast iron, iron & steel   1,125 1,251.0        1,407.2        818      916.3       749.1        -307      -281.3
 Copper & worked products 9,457     48.1          454.9      7,748       46.8       362.6      -1,709       -80.0
 Aluminium & worked
 products                  5,236    37.7          197.4      5,399       36.6       197.6         163         6.0
Overall effect                                                                                             -391.1
(Export – Import)
Of which : energy3                                                                                             -8.6
                                                              Sources : National Statistics Institute (INS) and BCT

1
  Figures are rounded off and comply with data in foreign trade chapter.
2
  Edible oil and for other usage.
3
  Exclusive of coal and coke imports which accounted for small quantities.

                                                       45
DEVELOPMENT OF TUNISIA’S
   ECONOMIC ACTIVITY
                      GLOBAL TRENDS IN ECONOMIC ACTIVITY
The international scene was marked in 2009 by ongoing fallout from the international financial
and economic crisis, which caused greater lack of confidence among investors and
consumers, falling demand, and a lower volume of trade and of international capital flows.
There was also a drop in production, especially in the sectors hit hardest by the crisis :
automotive industries, textiles/clothing, tourism and transport. This led to economic recession
in industrialised countries and slower growth in emerging and developing countries, with higher
unemployment.
Thanks to major programmes launched by governments and central banks (especially in
developed countries) to provide financial support and budgetary recovery as well as efforts
by international institutions to counter the financial crisis and foster economic recovery, there
was gradual improvement worldwide starting the third quarter of 2009. But persistently high
unemployment as well as climbing budget deficits and public indebtedness in a number of
countries (notably European) continued to cast a shadow over brighter prospects for the
world economy.
In this particularly difficult world context, Tunisia’s economy, which is open to the outside
world to a large degree, was affected by fallout from the crisis but to a relatively limited
degree. The areas most involved were production and exports by manufacturing industries,
tourism and both air and maritime transport as well as foreign investment flows. This was
caused mainly by deteriorating economic conditions in the European countries that are
Tunisia’s main trading partners. Thanks to ongoing structural reforms and State measures to
boost the economy introduced in a timely manner to limit the adverse effects of the crisis,
particularly for exporting industries, economic growth in 2009 managed to reach 3.1% in real
terms (vs. 4.5% the year before) and financial fundamentals remained sound.
This respectable growth rate despite world recession (-0.6% vs. 3% in 2008) that was
particularly bad in the euro zone (-4.1% vs. 0.6%) was made possible by strong domestic
demand, notably private consumption and public investment). However, the share of external
demand in economic growth was negative, following a drop in both export and import of
goods and services in constant terms: -6.9% and -8.2% respectively below 2008 figures.
Economic growth was led in particular by agriculture and fishing, where added value was up
by 6% in real terms (vs. a drop of 0.7% in 2008), thanks mainly to significantly higher cereal
production, which came to 25.3 million quintals vs. about 12 million a year earlier.
Similarly, growth in non manufacturing industries rose in 2009, reaching 3.7% (vs. 0.2% the year
before), in line with recovery in hydrocarbons exclusive of oil refining (3.5% vs. -5.1%) and higher
growth in construction and civil engineering (5.5% vs. 6.6%). Inversely, manufacturing industries,
under the impact of falling external demand, experienced a 3.3% drop in added value in constant
terms, compared to 3.5% growth a year earlier. This downturn involved the main export sectors,
in particular mechanical/electrical industries (-6% vs. 8.4% in 2008), textiles/clothing-
leather/footwear (-10% vs. -3.1%) and chemical industries (-0.9% vs. -2.2%). Similarly,
agrofood industries posted negative growth of 1.2% after growing by 6.5% in 2008.
Growth in market services was also affected by depressed international conditions, falling
from 6.6% to 4.7% in real terms. This was notably the result of slower growth in transport
                                                48
(0.5% vs. 5.5% in 2008) and slightly negative growth in added value in tourism (-0.3% vs.
4%). On the other hand, growth in the communications sector continued to rise at a steady
pace of 16% in real terms for the second straight year, up from 13.4% in 2007, reflecting the
phenomenal ongoing development of new information and communication technologies
(ICT).
With demographic growth stabilising at about 1% a year along with net transfers of factor
income and current transfers with abroad, average per capital income rose in 2009 by 6.2%
compared to 9.4% the year before, to 5,641 dinars.
In the area of investment, gross fixed capital formation (GFCF) in 2009 grew by 8.1% in
current prices in 2009 (compared to 13.1% the previous year), coming to 14,052 MTD. This
corresponds to an investment rate of 23.9% of GDP, vs. 23.5% a year earlier. In fact, higher
growth in public investment (19.4% vs. 15.9% in 2008) helped offset slower growth in private
investment (1% vs. 11.5%), with share of overall GFCF falling from 61.5% in 2008 to 57.4%.
Higher growth in investment was particularly in market services (13.4% vs. 4.7% a year
earlier), with a share of total that rose from 46.8% in 2008 to 49.1% in 2009, especially
transport, communications and housing, as well as agriculture and fishing (5.9% vs. 0.2%).
Inversely, there was less investment in manufacturing industries (-4.5% vs. 19.1% in 2008)
and slower growth in non manufacturing industries (3.4% vs. 28.5%).
Foreign direct investment (FDI) was down by some 33% in 2009, after a sizeable increase of
some 64% the year before to 2,279 MTD. This drop involved energy, real estate and tourism,
with no new foreign investment in the financial sector or transport. However FDI grew in
manufacturing industries and communications.
National savings, in a context of slower economic growth, rose by 5.8% in 2009 (down from
14.2% in 2008) to 12,941 MTD, with a savings rate expressed as a ratio of gross national
disposable income (GNDI) that was slightly lower than that recorded the previous year (22% vs.
22.3%). This helped finance almost 89% of total requirements to finance investment (including
stock variations), up from 85% a year earlier.
There was somewhat slower growth in overall final consumption in 2009 (down from 9.5% in
2008 to 7.7% in current prices and from 4.8% to 4% in constant prices). Public consumption
grew at a slower pace (down from 8% in 2008 to 7.3% in current prices and from 6.1% to
4.2% in constant prices), as did household expenditure (down from 9.9% in 2008 to 7.8% in
current prices and from 4.5% to 4% in constant prices). Despite such slower growth, final
consumption remained an essential factor for support to economic growth, especially in light
of the drop in exports.
The net total of new jobs in fishing and non agricultural activities was affected by difficulties
caused by prevailing conditions encountered by exporting companies as external demand
decreased, falling from 70,300 in 2008 to 57,000 jobs in 2009. Implementation by the State of a
set of measures to boost and revitalize the economy starting the end of 2008 and in the
framework of the supplementary finance law at the beginning of July 2009 helped maintain some
82,000 jobs. Overall, following a drop in the rate of coverage of additional demand by new jobs
created (down from 85.7% in 2008 to 67.1% in 2009), the unemployment rate went up slightly to

                                               49
13.3% of the working population (vs. 12.4% in 2008), using new methodology that is in line with
International Labour Organisation (ILO) norms.
Regarding prices, the inflation rate (calculated according to the general consumer price index
that uses a base of 100 in 2000) went down in 2009 to 3.7% vs. 5% the year before. Aside
from the impact of suitable monetary and budgetary policies, this lower rate was due mainly
to food and energy trends as prices fluctuated on world markets. There was also the
influence of ongoing price subsidies for basic consumer and oil products. If food and energy
are excluded, the increase in the overall level of consumer prices comes to 3.6% for 2009,
up from 3.3% in 2008.
In external payments, foreign trade decreased in 2009 due mainly to lower prices (especially
for energy, certain food products, and phosphates/phosphate-based products), and a lower
volume of trade for a number of products (notably energy). The decrease amounted to 17.6%
for exports and 14.4% for imports, compared to 21.8% and 23.7% progress respectively in
2008. This meant a drop of 3% (195 MTD) in the trade deficit and a three percentage point
decrease in the rate of coverage to 75.2%. Similarly, the rate of opening of the economy to
the outside world with reference to trade fell from 97.4% to 77.2% from one year to the next.
The drop in exports involved most sectors but in particular mining/phosphates-phosphate
based products (-50% vs. some +130% a year earlier), energy (-35.3% vs. +30%),
agriculture/fishing/agrofood industries (-14.2% vs. +14.2%), textiles/clothing-leather/footwear
(-8.9% vs. +0.4%) and mechanical/electrical industries (-3.7% vs. +18.3%).
The drop in imports was particularly high in energy (-43.2% vs. +63.7% in 2008), food
(-38.7% vs. +27.4%) and raw materials/semi-finished products (-21% vs. +30.2%). Inversely,
imported capital goods and consumer goods increased from 11.4% in 2008 to 13.9% and
from 5.8% in 2008 to 1.8% respectively.
In line with the drop in non resident entries (-2.1% vs. +4.2% in 2008) and overall bednights
(-9.2% vs. +2%), tourist receipts in foreign currency grew at a slower pace in 2009, down
from 10.2% in 2008 to 2.4% (-2.3% exclusive of the foreign exchange effect) to some
3,472 MTD.
On the other hand, work remittances continued to grow at a relatively satisfactory rate of
8.9% (vs. 10.8% in 2008) to 2,653 MTD. There was also a drop of some 8.4% in expenditure
for capital income, which posted 3,136 MTD.
Thus the current deficit remained at a manageable level in 2009: 1,666 MTD (2.8% of GDP)
vs. 2,109 MTD (3.8%) in 2008.
Net capital inflows went down by 241 MTD (6%) to 3,781 MTD, due to the lower volume of
FDI flows and the higher level of outlays to draw down the principal on medium and long
term external debt.
In light of these developments, the general balance of payments in 2009 showed a surplus of
2,204 MTD, an increase of 151 MTD over the 2008 figure. At the same time, net assets in
foreign currency continued to grow, reaching 13,353 MTD or the equivalent of 186 days of
imports. This compares to 11,656 MTD and 139 days at the end of the previous year.

                                              50
The rate of external indebtedness fell by 1.5 percentage point to 37.3% of GNDI, while the debt
service coefficient went up from 7.7% of current receipts abroad in 2008 to 10.5% in 2009.
Trends in the value of the dinar on the interbank foreign exchange market were marked in
2009 by 8.8% depreciation against the US dollar and 3.9% depreciation against the euro.
The financial market experienced an increase of some 47% in stock market capitalisation,
which reached 12,227 MDT or almost 21% of GDP vs. 15% in 2008. Furthermore, the
TUNINDEX rose by 48.4% (vs. 10.7% the year before) to close for 2009 at 4,291.7 points.
On the monetary front, the M3 aggregate increased by 13% in 2009 vs. 14.4% a year earlier.
Money in circulation grew at a faster pace than nominal GDP (the latter having gone up by 6.3%
in 2009 vs. 10.9% in 2008), which led to a 3.4 percentage point increase in the economy’s
liquidity rate, posting 62%.
Development of financial system resource counterparts was marked by major consolidation
of net claims on the State, up by 953 MTD (16.5%) vs. 108 MTD (1.9%) a year earlier. This
was in particular thanks to strong recovery in the outstanding balance of Treasury bonds in
banks’ portfolios. Loans to the economy increased by 10.3%, compared to 14% in 2008. Net
claims abroad continued to grow considerably, following a sizeable increase in net assets in
foreign currency.
In the area of public finance, the State’s core resources rose by a slight 0.4% in 2009 (after an
increase of 19.8% the year before) to about 13,766 MTD, influenced by the 12.7% decrease in
non tax revenue. This drop in income (following 2008’s high increase of 23.1%) was due
largely to the drop in income from stockholdings (-17.7%) and in loan collection (-12.8%), as
well as the absence of privatisation transactions (vs. 146.9 MTD the year before). Income from
oil and gas operations grew but at a slower pace than in 2008: 10% vs. 27.5%.
Tax receipts came to some 11,685 MTD (84.9% of overall core resources), after growing at a
lower rate of 3.1% vs. 19.2% in 2008. This slower pace was due mainly to the drop in
corporate tax on oil companies and customs duty, following respectively lower world prices
for energy and lower imports. Thus the tax burden fell from 20.5% in 2008 to 19.9% in 2009.
Outlays from the State budget (exclusive of redemption of debt principal, which came to
2,061 MTD vs. 2,134 MTD a year earlier) amounted to some 15,354 MTD in 2009, an
increase of 10.2% vs. 12.8% a year earlier. Operating expenses (exclusive of subsidies and
interest on public debt) went up by 9.8% vs. 9.1% in 2008 to almost 7,935 MTD, while the
cost of subsidies came to 1,430 MTD vs. 2,036 MTD a year earlier. Payment of interest on
debt increased from 1,142 MDT in 2008 to 1,180 MTD in 2009.
Capital expenditure including the granting of loans (external loans onlended to public
enterprises as well as the Treasury’s net loans and advances) was up by 36.3% vs. 8.2% in
2008, reaching some 4,809 MTD, in line with greater investment in basic infrastructure and
community facilities as well as support to private investment to boost economic recovery.
The budget deficit (exclusive of reimbursement of debt principal, income from privatisation
and grants from abroad) came to 1,771 MTD (3% of GDP), compared to 1% the year before.
On the other hand, the State’s overall rate of indebtedness (domestic debt and external debt)
went down slightly, from 43.3% of GDP in 2008 to 42.9% in 2009.
                                               51
TRENDS IN TUNISIA’S MAIN ECONOMIC INDICATORS                                           (In MTD unless otherwise indicated)
                                                                                                          Variation in %
                         Description                           2006        2007        2008     2009
                                                                                                         2008/07 2009/08
 Accounts of the Nation
 -GDP growth (in constant 1990 prices)                   5.7                  6.3          4.5         3.1
   *Added value in agriculture & fishing                 7.9                  0.8         -0.7         6.0
 -GDP (in current prices)                            45,756               49,874       55,297      58,768      10.9       6.3
 -Gross national disposable income (GNDI)            45,754               49,648       54,867      58,863      10.5       7.3
 -GNDI per capita (in dinars)                          4,518               4,856        5,312       5,641       9.4       6.2
 -Total national consumption                         35,889               38,939       42,639      45,922       9.5       7.7
   *Public consumption                                 7,646               8,230        8,892       9,543       8.0       7.3
   *Private consumption                              28,243               30,709       33,747      36,379       9.9       7.8
                                                   1
 -Av. propensity to consume (consump./GNDI) in %        78.4                78.4         77.7        78.0      -0.7       0.3
 -Gross national savings                               9,865              10,709       12,228      12,941      14.2       5.8
 -National savings rate (in % of GNDI)1                 21.6                21.6         22.3        22.0       0.7      -0.3
 -Gross fixed capital formation (GFCF)               10,333               11,490       13,001      14,052      13.1       8.1
   *Public sector                                      3,926               4,324        5,010       5,984      15.9      19.4
   *Private sector                                     6,407               7,166        7,991       8,068      11.5       1.0
 -Investment rate (in % of GDP)1                        22.6                23.0         23.5        23.9       0.5       0.4
 Prices
 -Industrial sale price index (base 100 in 2000)       125.4               129.6        145.3       148.2      12.1        2.0
 -Consumer price index (base 100 in 2000)              118.9               122.7        128.8       133.6       5.0        3.7
       . Foodstuffs                                    121.5               124.9        132.6       138.3       6.2        4.3
       . Other than food products and services         117.5               121.5        126.6       130.8       4.2        3.3
 Employment
 -Jobs created (in thousand jobs)2                      76.4                80.2         70.3         57.0    -12.3     -18.9
 -Coverage rate of additional demand (in %)1            86.8                92.2         85.7         67.1     -6.5     -18.6
 -Unemployment rate in %1                               12.5                12.4         12.4         13.3      0.0       0.9
 External payments
                                            1
 -Rate of coverage (exports/imports in %)               77.8                79.4        78.2         75.2       -1.2      -3.0
 -Balance of trade deficit (FOB/CIF)                   4,445               5,027       6,604        6,409      31.4       -3.0
 -Tourist receipts                                     2,825               3,077       3,390        3,472      10.2        2.4
 -Workers’ remittances                                 2,010               2,199       2,436        2,653      10.8        8.9
 - Current deficit3                                      824               1,175       2,109        1,666       934      -443
  . In % of GDP1                                         1.8                 2.4         3.8          2.8        1.4      -1.0
 -Net inflows of capital3                              3,647               2,105       4,022        3,781     1,917      -241
 - Overall BOP balance3                              +2,773                +883       +2,053       +2,204     1,170       151
 -External debt service ratio (in % of current
 receipts)1                                             16.4                11.7          7.7         10.5      -4.0       2.8
                                                 1
 -Rate of external indebtedness (in % of GNDI)          43.0                39.7         38.8         37.3      -0.9      -1.5
 Public finances
 -Tax burden (in % of GDP)1                             18.5                19.1         20.5        19.9        1.4     -0.6
 -Equipment and loan granting expenditure            2,861.6             3,261.6      3,527.6     4,809.4        8.2     36.3
 -Budget deficit in % of GDP1/4                          2.6                 2.7          1.0         3.0       -1.7      2.0
 -Total State indebtedness/GDP (in %)1                  48.6                45.8         43.3        42.9       -2.5     -0.4
 Monetary incators5
 - M3 aggregate                                      26,546               29,853       34,148      38,591      14.4      13.0
   .Liquidity rate of the economy (M3/GDP) in % 1       55.5                56.6         58.6        62.0       2.0       3.4
 -Net claims abroad 3                                  5,686               6,592        8,176       9,631     1,584     1,455
  of which : .Net assets in foreign currency 3         8,705               9,582       11,656      13,353     2,074     1,697
              .In day of imports6                        157                 141          139         186        -2        47
 -Net claims on the State3                             5,165               5,674        5,782       6,735       108       953
 -Financing of the economy                           26,157               28,681       32,689      36,060      14.0      10.3
               Sources : Central Bank of Tunisia, Ministry of Development & International Cooperation, Ministry of Finance & INS

1. Variation in percentage points.                          4. Exclusive of debt amortisation, privatisation proceeds and grants.
2. In fishing and non-agricultural activities.              5. Financial system.
3. Variation in MTD.                                        6. Variation expressed in days.

                                                              52
                               I. AGRICULTURAL ACTIVITY
The agricultural and fishing sector posted better performance in 2009, thanks to greater
diversity and a higher volume of production in several branches of activity, notably cereal and
tree farming. This improvement was made possible by State-supported efforts to strengthen
mechanisation, expand irrigated land, promote organic agriculture, make greater use of
selected seeds, focus on the results of agricultural research, modernise means for storing
and marketing agricultural and fishing products, and develop agrofood industries.
The sector’s better results, despite the impact of fluctuating weather, were the fruit of
multiple, successive reforms targeting enhanced performance in the sector and its role in
economic and social development and food self-sufficiency. These reforms focused on
higher profitability, promotion of rural zones, encouragement of investment, mobilisation and
exploitation of water resources, enhanced yields and quality, and promotion of research and
extension work.
Thus new measures seeking to intensify production, promote strategic products, and stand
up to fluctuating weather and changing world conditions were taken on 20 May 2009. They
concerned in particular :
       - elaboration of a master plan to manage the Oued Medjerda water system in order to
limit the adverse effect of floods and to implement a programme to drag the river at certain
places,
      - better yields on state agricultural land, opting for the most part for various forms of
direct partnerships,
     - implementation of the programme to upgrade agricultural operations and granting of a
subsidy for intangible investment corresponding to some 70%, while also addressing
considerations of quality, and
      - establishment of appropriate mechanisms for the financing of agricultural activity,
particularly by means of :
             x ongoing funding to small scale farmers, for whom loans granted by micro-
finance structures are not to exceed 4,000 dinars, at an interest rate of 5% a year
              x funding to farmers, for whom loans granted by the national agricultural bank
BNA and the Tunisian solidarity bank BTS ranged between 4,000 and 40,000 dinars, at an
interest rate of 5% a year, with a margin of one percentage point for seasonal loans and two
points for medium and long term loans to farmers who repay their debts as scheduled
             x stronger partnerships between micro-credit associations and agricultural
professional structures, with a view to helping their affiliates secure micro-credit.
Moreover, the agricultural and fishing sector received greater attention thanks to the priority it
has received in development plans and presidential programmes, given its contribution to
the country’s economic and social development. The presidential programme (2009-2014)
announced in its 20th point several measures for the agricultural sector, meant to help it
counter adverse weather and to meet the challenges of changing conditions. These
measures involved in particular :

                                               53
      - the carrying out of prospective studies for the years leading up to 2050 in the water
sector,
     - mobilisation of water resources at a rate of 95% by the start of the second half of the
2010-2020 decade,
     - pursuit of the programme to connect dams and transfer surpluses,
     - a better forest coverage rate, targeting an increase from the current 12.8% to 16% by
about 2020,
     - achieving self-sufficiency in hard wheat over the coming five year period,
     - an increase in fish farming’s share in national fish production to 10% by about 2014,
     - doubling of the land area devoted to organic agriculture to 500,000 hectares in 2014
and increasing by 50% the land area devoted to protected and geothermal crops to
310 hectares that same year,
      - introduction of new instruments to provide funding to agriculture that are appropriate
to qualitative and technological changes in the sector, and
     - establishment of a Tunisian label for agricultural products destined for foreign
markets.
In this framework and with a view to implementing the presidential programme for the coming
five year period, particular attention has been given to development of organic and irrigated
agriculture.
Tunisia is ranked second in Africa in organic agriculture and 24th out of 141 countries
worldwide, with some 170,000 tonnes of production in 2008 vs. 30,000 tonnes in 2004.
This was accomplished by means of incentives that helped increase land area, up from
34,000 hectares in 2003 to 285,000 hectares in 2008.
These promising indicators are the result of agricultural policy oriented toward reform and
incentives targeting promotion of this strategic sector, better yields, and assurance that the
required level of quality is delivered and that international norms are met. This was
accomplished in particular by increasing training, supervision, research and monitoring as
well as action in the areas of control and certification.
To this end, measures in support of organic agriculture were decided at the meeting of the
ministerial council on 27 January 2010. They include in particular an increase in the annual
subsidy to producers from 5,000 to 10,000 dinars for control and certification, institution of
the «week of Tunisian organic products», introduction of a programme to market organic
products in the tourism sector, and creation of a national laboratory working in organic
agricultural research.
Although there are only some 405,000 hectares of irrigated crops (8% of the overall area of
agricultural land that can be farmed), it contributes some 37% on average to agricultural
added value and 10% of the sector’s overall exports, employing 27% of manpower in
agriculture and covering 90% of domestic demand for vegetables and 75% for fruit.



                                             54
A strategy was adopted to boost the rate of use of irrigated land to 95% in 2014, up from
93% at this time. To implement this strategy, presidential measures were taken at a
ministerial council meeting on 3 March 2010, focusing on five main concerns: land issues,
hydraulic systems, marketing, extension work, and water conservation. The goal is to make
better use of water and to favour high-productivity intensive agriculture, in order to promote
the contribution of irrigated land to overall agricultural production, boost the sector’s
competitiveness and ensure its sustainability.
Ongoing attention to reforms and measures that provide incentives and assistance to
the agricultural and fishing sector, in combination with favourable weather throughout the
2008-2009 season, helped achieve a notable increase in production of most agricultural
products, mainly cereals (harvests having almost doubled), along with virtual self-sufficiency
in meeting consumer demand, with the exception of a few products.
In this context added value in the agricultural and fishing sector rose in 2009 by 6% in real
terms, compared to a drop of 0.7% in 2008. Thus the sector’s contribution to economic
growth came at some 15% or 0.5 percentage point.

                               AGRICULTURE & FISHING : GROWTH IN ADDED VALUE
                           AND CONTRIBUTION TO ECONOMIC GROWTH (In constant prices)
                  36                                                                                                  60

                  28                                                                                                  35
 Growth rate in




                  20                                                                                                  10




                                                                                                                            Contribution in
  percentage




                                                                                                                             percentage
                  12                                                                                                  -15

                   4                                                                                                  -40

                   -4                                                                                                 -65

                  -12                                                                                                 -90
                    2000      2001       2002       2003       2004        2005     2006     2007       2008      2009
                                Growth rate in agriculture and fishing              Contribution to economic growth


Fixed gross capital formation in the sector increased by some 6% (compared to virtual
stagnation in 2008) to 977 (7% of total investment). The share of private investment came to
more than 57% of the total amount of investment, mainly in the areas of acquisition of
agricultural material, agricultural irrigation, and livestock development.
TREND IN THE MAIN INDICATORS OF AGRICULTURE AND FISHING SECTOR
                                                                                               (In % unless otherwise indicated)
                   Description                                               2006          2007          2008            2009
Real growth of added value                                                7.9         0.8           -0.7            6.0
Added value in current price/GDP                                          9.3         8.6            7.9            8.2
Investment (in MTD)                                                      913          921           923            977
 - Variation                                                            16.0          0.9            0.2            5.9
 - Private sector share                                                 54.1         59.4          58.5           57.3
 - Share in global GFCF                                                   8.8         8.0            7.1            7.0
Balance of food balance (in MTD)                                         277         -425          -751              38
Rate of coverage of food balance                                       121.0         79.2          71.1          102.4
                           Sources : Ministry of Development and International Cooperation and National Statistics Institute


                                                                      55
With agricultural activity on the rise and the prices of food products falling considerably on
international markets, imports of agricultural, agrofood and fishing products fell by 26.4% in
2009, essentially for cereals (-35.2% in terms of quantity and -57.5% in terms of value).
Exports also went down, by 14.2%, notably exports of olive oil (-16.2% in terms of quality and
-29.7% in terms of value). This trend helped to create a surplus of 38 MTD in the balance of
food, compared to a deficit of 751 MTD in 2008.

                           GROSS FIXED CAPITAL FORMATION (GFCF) AND LOANS (MLT)
                                       TO AGRICULTURE AND FISHING
              1,000                                                                                                   1,000
               900                                                                                                    900
               800                                                                                                    800
               700                                                                                                    700
     In MTD




               600                                                                                                    600
               500                                                                                                    500
               400                                                                                                    400
               300                                                                                                    300
               200                                                                                                    200
               100                                                                                                    100
                  2001         2002        2003         2004       2005          2006         2007     2008        2009
                               GFCF in agriculture & fishing           Medium & long term bank outstanding loans


A. ANNUAL CROPS
Production of annual crops was up in 2009 for cereals, pulses, melons and watermelons, but
that of most market garden crops went down.
1. LARGE SCALE FARMING
Large-scale crops (cereals and pulses) posted significantly higher harvests in 2009, thanks
to favourable weather and better yields.
a. Cereals
Despite insufficient water supply at the beginning of the agricultural season, cereal was
sowed on 1,391,000 hectares for the 2008-2009 agricultural year, an increase of 4.4% over
the previous season’s figure.
CEREALS : PLANTED AREAS, PRODUCTION AND YIELD
                          Areas sowed with cereals                Production (in millions                  Yields
                         (in thousands of hectares)                    of quintals)                   (in quintals per
     Season                                                                                               hectare)
                      Hard Soft         1
                                                     Total     Hard Soft         1                  Hard Soft Barley1
                                                                                              Total wheat wheat
                      wheat wheat Barley                       wheat wheat Barley
    2002-2003            794      133       592       1,519     16.4       3.4          9.2   29.0    20.7     25.6       15.5
    2003-2004            881      154       608       1,643     14.0       3.3          6.2   23.5    15.9     21.4       10.2
    2004-2005            813      148       473       1,434     12.9       3.4          4.7   21.0    15.9     23.0        9.9
    2005-2006            857      143       588       1,588     10.3       2.2          3.6   16.1    12.0     15.4        6.1
    2006-2007            732      124       500       1,356     11.8       2.7          5.4   19.9    16.1     21.8       10.8
    2007-2008            649      136       548       1,333      7.3       1.9          2.7   11.9    11.2     14.0        4.9
    2008-2009            679      124       588       1,391     13.5       3.0          8.8   25.3    19.9     24.2       15.0
1
    Including triticale.                                   Source : Ministry of Agriculture, Hydraulic Resources and Fishing


                                                                  56
The increase in land area involved barley and triticale, and to a lesser degree hard wheat.
There were 94,000 hectares of irrigated land, up from 75,000 for the 2007-2008 season,
virtually the same level as that programmed.
Thanks to good weather for the most part, notably heavy rain over the winter and spring of
2009, cereals were harvested on 1,338,000 hectares, representing about 96% of planted
fields. Thus 25.3 million quintals were produced over the 2008-2009 agricultural season :
13.5 million quintals of hard wheat and 8.8 million quintals of barley and triticale, compared to
a total of 11.9 million quintals the previous season. This sizeable increase in the harvest was
attributable to considerably higher yields per hectare for all kinds of cereals but more
particularly soft wheat and hard wheat. This level of production, which is near that of national
consumption, is the highest of the past decade, except for the 2002-2003 season when it
came to 29 million quintals.
Irrigated land accounted for just 6.8% of cereal plantings, but provided 15% of overall
production, 3.8 million quintals vs. 2.3 million the previous season, with average yield per
hectare of more than 40 quintals vs. some 30 quintals for the 2007-2008 agricultural season.

                                 SOFT WHEAT PRODUCTION AND IMPORTS
             1,200                                                                               1,200

             1,000                                                                               1,000

                 800                                                                             800
  In thousands
    of tonnes




                 600                                                                             600

                 400                                                                             400

                 200                                                                             200

                   0                                                                             0
                   2000   2001   2002   2003         2004    2005   2006        2007   2008   2009

                                        Production                    Imports


The cereal harvest was of high quality for soft wheat and barley, but harvested hard wheat
was damaged by spring rain. 11.2 million quintals of cereal were collected (6.5 million
quintals of hard wheat and 2.8 million quintals of barley), compared to a total of 4.8 million
quintals the season before, i.e. a collection rate of some 44% of overall production vs. a rate
of 40% recorded for the 2007-2008 season.
This development was favoured by the greater participation of private parties in collection
operations with more efficiency and mastery of techniques in this field, in addition to
maintaining of the exceptional premium for deliveries of cereals prior to 31 August 2009 in
the amount of 15 dinars per quintal for hard wheat and 10 dinars per quintal for soft wheat,
barley and triticale. The share of private operators in collection operations went up
considerably, but still it was modest (16% of overall production or 36.2% of collected
quantities, compared to 8.7% and 22% respectively for the previous season). Worth of note
that production price for hard wheat went up by 3 dinars per quintal while the other cereal
product prices maintained the same level.

                                                        57
TRENDS IN CEREAL PRODUCTION PRICES                                                      (In dinars per quintal)
                 2002   2003    2004                  2005       2006         2007        2008        2009
 Hard wheat       29.5   29.5    29.5                  30.5         30.5       32.8        40          43
 Soft wheat         26     26      26                    27           27       28.7        35          35
 Barley             17     17      17                    18           18         20        30          30
 Triticale          17     17      17                    18           18         20        20          20
                                           Source : Ministry of Agriculture, Hydraulic Resources and Fishing

Import prices went down significantly in the wake of lower world prices.
TRENDS IN AVERAGE IMPORT PRICES FOR CEREALS                                              (In dinars per tonne)
                                                                                     Variation in %
                       2006         2007            2008           2009
                                                                                 2008/2007 2009/2008
 Hard wheat             277          547              722           463               32.0          -35.9
 Soft wheat             229          360              468           292               30.0          -37.6
 Barley                 222          338              381           242               12.7          -36.5
                                                                          Source : National Statistics Institute

As for financing of the cereal season, the amount of loans granted to cereal farmers by the
national agricultural bank came to almost 49 MTD, compared to about 38 MTD a year earlier.
Taking into account settlement of late payments, reimbursements came to 65.6 MTD,
compared to 35.4 MTD for the 2007-2008 season.
The 2009-2010 cereal season began with favourable weather, after heavy rain fell in October
2009 throughout the country. But the virtual absence of rain in the months thereafter caused
a reduction in land area planted in cereals compared to the previous season, coming to
1,254,000 hectares, of which 110,000 hectares were irrigated land.
This situation combined with adverse weather (mainly insufficient rain in January and
February 2010), will probably affect yield per hectare and thus the size of the harvest.
Given the previous year’s good results and the enthusiasm with which farmers reacted to
presidential measures to limit the effect of adverse weather, authorities decided to pursuit the
same policy of incentives and assistance to cereal farmers. This included notably
equalisation for the price of selected seeds and maintaining of cereal production prices
despite lower prices on the world market, along with the exceptional bonus for deliveries of
cereal prior to 31 August 2010.
b. Pulses
Some 80,000 hectares were devoted to pulse crops, a drop of some 6%. This was
attributable in particular to abundant rain at the time of planting, which had an influence on
the land area devoted to spring pulses.
Despite the decrease in land area, overall production was up by some 11% to about 90,000 ton-
nes, 83,000 tonnes of which were winter pulses (essentially flat beans and lima beans),
thanks to higher yields per hectare for most of the varieties grown.
2. MARKET GARDEN CROPS
Aside from melons and watermelons, production of market garden crops in 2009 posted a
drop. This involved tomatoes, potatoes, pimentos and onions in particular. Nonetheless,
supply to the domestic market took place under good conditions, particularly for sensitive
products, thanks to use of buffer stocks and imports.

                                                 58
Production of fresh tomatoes, after reaching a record high the year before, went down by
115,000 tonnes (9.2%) to 1,135,000 tonnes, made up of 876,000 tonnes of seasonal
tomatoes and 259,000 tonnes for early-season fruits and vegetables and late-season
production, with total cultivated land coming to 27,700 hectares (+1.5% compared to the
previous year). The smaller harvest was due mainly to the tuta absoluta tomato insect that
infested a portion of overall production. The disease hit most of the tomato producing
countries and the authorities and producers monitored the situation closely, organising
training and awareness-building campaigns to fight spread of the disease. Consequently, just
690,000 tonnes were processed (down from 807,000 in 2008) to provide 119,000 tonnes of
concentrated tomato paste, compared to 138,000 tonnes the year before. National
consumption is estimated at some 100,000 tonnes. The lower volume of newly produced
concentrated tomato paste along with a carry-over buffer stock of just 2,000 tonnes had a
negative effect on exports of this product, which came to just 10,800 tonnes in 2009, down
from 23,700 in 2008.
MARKET GARDEN CROPS                                                               (In thousands of tonnes)
                          2002     2003      2004       2005        2006       2007      2008      2009
Tomatoes                   810      880       970         960        855      1,029     1,250     1,135
Peppers                    242      247       255         256        260        278       291       281
Melons & watermelons       411      395       450         446        467        554       552       590
Potatoes                   310      310       375         310        365        357       370       324
Onions                     257      241       230         262        355        350       380       353
Artichokes                  16       13        12          12          16        19        18        16
                                          Source : Ministry of Agriculture, Hydraulic Resources and Fishing

Potato production came to 324,000 tonnes, 12.4% less than in 2008, due to the smaller land
area devoted to this crop, down from 25,600 to 22,600 hectares. The deficit in production
compared to ever-growing demand was made up (especially during production gaps) by
recourse to imports. Indeed, some 48,000 tonnes were imported in 2009 for consumption, vs.
2,700 a year earlier.
In light of insufficient production and in order to promote exports, a national strategy for
cultivation of potatoes was established. It targets essentially development of production,
building up of stocks to help guarantee sound management of the harvest, export of certain
potato varieties, promotion of national seed production, and incentives to private investors for
carrying out projects in this field.
The 2008-2009 pimento harvest came to 281,000 tonnes, a drop of 10,000 tonnes (3.4%)
due to the 4% decrease in cultivated land, which amounted to 18,900 hectares. However, hot
pepper paste (harissa) production went up by 9% to 26,600 tonnes. Consequently, harissa
exports posted an increase of 6.2% in terms of volume and 27.5% in terms of value, coming
to 12,000 tonnes worth 29 MTD.
Melon and watermelon production rose in 2009 by almost 7% to 590,000 tonnes, following
both an increase in cultivated land (up to 20,800 hectares) and better yields.
B. TREE FARMING
Thanks to favourable weather, tree crops for the 2008-2009 season were marked by good
harvests for most products, except olive oil.

                                                59
1. OLIVES FOR OIL
The 2008-2009 harvest of olives for oil amounted to some 800,000 tonnes, pressed to
produce 160,000 tonnes of oil vs. 200,000 the year before. This meant a lower level of
exports, down from 174,000 in 2008 to 142,000 tonnes in 2009. There was also a significant
drop in prices on the international market, with world supply high and the international
financial crisis having a negative effect on demand. This kept exports down, with 96% of
shipped quantities coming from private operators.
OLIVE OIL PRODUCTION AND EXPORTS                                                                  (In thousands of tonnes)
                                    2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
    Production                          72       280       130       210       180        200           160         150
    Exports                             39       209        98       167       194        174           142         1301
                                                                                        Source : National Oil Board (ONH)

Exports of processed olive oil for the 2008-2009 season came to 5,500 tonnes (4% of total),
vs. 2,400 tonnes (1.4%) the previous season. The objective targeted in this area is to
increase the processed olive oil export rate to 10% by 2011, especially to new markets such
as the US, Canada and Japan. For the 2009-2010 season, production of olive oil was down
by some 10,000 tonnes (6%) to 150,000 tonnes, against an export target of 130,000 tonnes.

                                             EDIBLE OIL PRODUCTION, EXPORTS AND IMPORTS2
                              300                                                                                           300


                              250                                                                                           250
     In thousands of tonnes




                              200                                                                                           200


                              150                                                                                           150


                              100                                                                                           100


                               50                                                                                           50


                                0                                                                                           0
                                    2000      2001      2002   2003   2004      2005      2006   2007     2008      2009
                                       Olive oil production           Olive oil exports             Vegetable oil imports


2. CITRUS FRUITS
The citrus fruit harvest for the 2008-2009 season came in at about the same level as the
previous year: 297,000 tonnes. It was marked by a drop in production of Maltese oranges
(-18.9%) to about 116,000 tonnes, 39% of total vs. 48% for the 2007-2008 season. On the
other hand, production rose for all other varieties, notably tangerines (28.1%) and lemons
(11.5%).
Citrus exports, made up essentially of Maltese oranges, were down by 14.6% from the figure
for the 2007-2008 season, amounting to 23,400 tonnes. France remained the main market
with an 84% share of overall exported volume.

1
    Forecasts.
2
    Second year of the agricultural season for production and export of olive oil and edible vegetable oil for imports.
                                                                         60
CITRUS FRUIT PRODUCTION AND EXPORTS                                               (In thousands of tonnes)
                   2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
    Production         225       209       243       262       247        300            297       309
    Exports           17.2      18.6      19.1      19.3      16.3       27.4           23.4      25.01
                                                                   Source : Inter-professional Fruit Group

Citrus production over the 2009-2010 season enjoyed recovery, posting 309,000 tonnes,
thanks to 18.6% higher production of Maltese oranges to 137,000 tonnes. Export potential is
estimated at 25,000 tonnes, of which 23,000 tonnes are Maltese oranges. These positive
results are the fruit of efforts to boost competitiveness in this agricultural branch. This
included introduction over the past decade of a series of programmes targeting in particular
the development of citrus production, seeking to increase planting of Maltese orange trees
and to promote exports by securing new markets.
3. DATES
Date production for the 2009-2010 season amounted to 162,000 tonnes, of which
110,000 were of the deglet nour variety. This represented respective increases of 17,000 and
15,000 tonnes over the previous season’s figures. The increase was due to several factors,
notably upkeep of date regimes, protection of fruits against bad weather, and use of the right
irrigation techniques. The export objective was set at 70,000 tonnes, the same level as the
previous year. Between October 2009 and 10 March 2010, exported quantities amounted to
31,400 tonnes worth 104.2 MTD, up from 27,000 tonnes and 80.8 MTD over the same period
of the 2008-2009 season.
DATE PRODUCTION AND EXPORTS                                                   (In thousands of tonnes)
                   2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
    Production        115      111        122       113       131       124         145        162
     of which :
     Deglet nour       72        68           76           70         82           78           95         110
    Exports            42        40           53           43         59            61          70            701
                                                                           Source : Inter-professional Fruit Group
4. GRAPES
Wine grape production suffered a drop of 14.3% in 2009 to some 36,000 tonnes, which when
processed produced 254,000 hectolitres of wine, compared to 300,000 in 2008. With a carry-
over stock of some 101,000 hectolitres at the end of August 2009, overall availability of wine
for the current marketing campaign came to 355,000 hectolitres, compared to 430,000 the
previous season. Table grape production rose by 15,000 tonnes (18.1% over the 2008
figure) to 98,000 tonnes.
5. OTHER FRUITS
Aside from a few products, harvest of other fruits over the various seasons of the year
continued to increase in 2009, favoured by more land planted and renewal of plantings,
along with introduction of new varieties.
MAIN PRODUCTION OF OTHER FRUITS                                                         (In thousands of tonnes)
                 2002  2003     2004                       2005      2006        2007        2008        2009
Apple            100    99      135                      100          120         101        110       110
Pears             68    60       62                        53          65          53         75         60
Dry-shell almond  18    36       44                        43          56          58         51         60
Apricots          25    26       27                        26          28          24         27         30
Pomegranates      63    66       69                        68          71          71         75         75
                                               Source : Ministry of Agriculture, Hydraulic Resources and Fishing

1
    Forecasts.
                                                      61
C. LIVESTOCK FARMING
Reform in this sector continued in 2009, especially with regard to promoting the dairy branch
and enhancing quality so as to boost the sector’s competitive edge, along with development
and diversification of fodder resources.
Nevertheless, because of the difficulties encountered by the agricultural sector during the
2007-2008 season, especially after prices for fodder products went up and adversely
affected the size of herds and yields, production of red meat recorded a drop of 5.5% in 2009
to 125,000 tonnes. This was enough to ensure supply of the domestic market in a normal
manner, but at prices that fluctuated during periods of high consumption, particularly tourist
season and the month of Ramadan.
PRODUCTION OF RED MEAT AND MILK                                                                              (In thousands of tonnes)
                                                                                                                 Structure in %
                                   2003          2004      2005     2006        2007       2008      2009
                                                                                                                 2008     2009
    Meat1                             118.5      115.1     116.7    122.8       128.1      132.3     125.0          100.0        100.0
     -beef                             57.7       53.7      52.7     56.1        60.3       62.1      57.5           46.9         46.0
     -lamb                             51.4       52.0      53.4     55.7        56.8       58.7      56.5           44.4         45.2
     -goat                              9.4        9.4      10.6     11.0        11.0       11.5      11.0            8.7          8.8
    Fresh milk                          891        864       920      971       1.006      1.010     1.030          100.0        100.0
    of which :
    collected
    quantities                        458         483         517       560       580       600       603       59.4       58.5
                           Sources : Ministry of Agriculture, Hydraulic Resources and Fishing and the Breeding and Grazing Board

Production of fresh milk rose by 2% in 2009 to 1,030,000 tonnes. Of this total, 603,000 ton-
nes (58.5%) were collected, up from 600,000 tonnes (59.4%) a year earlier. Dairy industries
continue to be a strategic axis for promoting the livestock sector, given its importance for the
country’s food security. Thus with a view to promoting milk production, increasing farmers’
income, and encouraging livestock farmers to maintain and further develop herds, production
prices for milk were raised by 30 millimes per litre on 22 January 2010 to 580 millimes. This
price is considered to be a guaranteed minimum, with the quality of milk remaining a priority.

                                                         MEAT PRODUCTION AND IMPORTS
                            260                                                                                             24

                            240                                                                                             20
                                                                                                                                  thousands of tonnes
     thousands of tonnes




                            220                                                                                             16
                                                                                                                                       Imports in
        Production in




                            200                                                                                             12

                            180                                                                                             8

                            160                                                                                             4

                            140                                                                                             0
                               2000       2001     2002      2003    2004       2005      2006     2007      2008      2009

                                                              Production                Imports


1
    Cleaned meat and offal.
                                                                           62
The production of poultry for meat went up by 4% (5,000 tonnes) over the 2008 figure,
reaching 131,000 tonnes. Production did however fluctuate from one period to another,
requiring intervention by the interprofessional grouping for poultry products GIPA to regulate
the market and keep prices down through recourse to buffer stocks. As was the case for
poultry meat, egg production went up in 2009 by 6% to 1,569 million units.
POULTRY PRODUCTION
                          2002        2003         2004        2005       2006        2007       2008       2009
 Poultry meat
 (in 1,000 tonnes)          113         118          135        132          106        122        126        131
 Eggs (in millions)       1,487       1,390        1,472      1,538        1,471      1,461      1,480      1,569
                                                  Source : Ministry of Agriculture, Hydraulic Resources and Fishing

Breeding stock, which has remained virtually stationary since 2005, went down slightly for
the main animal species, sheep in particular.
BREED STOCK                                                                                  (In thousands of heads)
                  2002        2003            2004        2005         2006         2007         2008       2009
 Cows               485         450             436        444           450          454          449        440
 Sheep            3,990       3,924           3,963      4,044         4,095        4,568       4,097      4,075
 Goats              798         801             809        810           820          855          828        811
                                                  Source : Ministry of Agriculture, Hydraulic Resources and Fishing

D. FISHING
The fishing sector, which is one of Tunisia’s main agricultural activities, continues to play a
strategic role both economically and socially due to its contribution to sustainable
development for Tunisia. It was the object of multiple reforms that focused essentially on
upgrading of the sector, organisation of fishing seasons in line with the specificities of each
species, and implication of the profession and of scientific research in the evaluation and
promotion of fishing activities, in addition to safekeeping of marine resources from
overfishing and unregulated fishing.
These reforms led to promulgation of law n°2009-17 of 16 March 2009 concerning fisheries
closure for natural stock regeneration and how this can be financed. Application of this
system involves banning of fishing (for biological rest) between 1 July and end September of
each year, the main goal being to conserve the marine ecosystem and allow renewal of
fishing resources, especially in zones where they are on the wane. Financing of such closure
was handled by the agriculture and fishing sector’s competitiveness-building fund, by
granting material aid to fishermen during the period of closure. Fishermen’s contribution to
this fund is set at 1% of turnover on the local market and 2% of the value of exported
products. 1,812 fishermen received funds amounting to 2.6 MTD for the period of closure in
2009. Worth of note that the fund to finance biological rest in the fishing sector was created
as per the finance law for 2010 (articles 11, 12 and 13).
Production in the fishing sector remained virtually unchanged in 2009 (-0.6%) compared to
the 2008 figure, coming to 100,000 tonnes of which almost 49,000 tonnes came from lantern
fishing and 23.000 tonnes from coastal fishing.




                                                        63
FISHING PRODUCTION                                                                            (In thousands of tonnes)
                                                                                                  Variation in %
                     2003     2004       2005     2006        2007      2008       2009
                                                                                            2008/2007 2009/2008
Coastal fishing       26.2     27.4       27.0    27.0        25.8       23.6       22.8        -8.5           -3.4
Lantern fishing       35.7     47.0       48.8    53.4        50.8       49.0       48.8        -3.5           -0.4
Trawling              27.8     29.0       24.8    23.5        21.3       20.4       20.3        -4.2           -0.5
Miscellaneous          5.1       6.9       8.1      7.0        7.2        7.6        8.1         5.6            6.6
     Total            94.8 110.3        108.7    110.9       105.1     100.6      100.0         -4.3           -0.6
 Sources : General Department of Fishing and Aquaculture at the Ministry of Agriculture, Hydraulic Resources and Fishing

In the area of marketing, exports of seafood posted 16,300 tonnes worth 182 MTD in 2009,
compared to 20,000 tonnes worth almost 238 MTD the year before, in third place for food
exports behind olive oil and dates. Imports amounted to some 47,000 tonnes, the same level
as in 2008, worth 90 MTD and 87 MTD respectively.




                                                         64
                                 II. INDUSTRIAL ACTIVITY

Development strategy in the industrial sector was marked in 2009 by ongoing reforms that
seek to bring the sector in line with the situation worldwide, notably by tapping capacity for
innovation and creativity, improving the business climate, and promoting exports as a means
to containing the impact of the international financial crisis.
Efforts focused on carrying out of a strategic study for Tunisian industry in the years leading
up to 2016 and implementation of coherent strategies to attract private investment in
promising activities that contribute to attainment of national priorities, with special emphasis
on economic growth, new jobs, and higher exports.
Particular attention was given to better integrating inland regions in the economy by
launching a new generation of integrated development programmes designed to make the
most of their investment potential and of opportunities for new initiatives at the regional level.
Thus 10 major industrial and 41 subcontracting initiatives started activity in these inland
regions thanks to foreign investment, especially in automotive parts and textiles/clothing,
leading to more than 7,500 new jobs. Furthermore, day events were organised to talk about
partnership and setting up of new businesses in the relevant governorates. With an eye to
promoting private investment and boosting regional development, banks took part in these
events.
At the same time, national programmes for upgrading and modernising the industrial sector
(including services to industry) moved ahead. The industrial modernisation programme PMI
that began in 2003 with the support of the European Union provided assistance to the
national economy in general and to small and medium sized industrial companies in
particular. This programme, which ended in December 2009, met the objectives initially set,
with some 1,300 companies and more than 20 support structures taking advantage of
assistance from the programme in the amount of some 31 million euro to carry out activities
under the upgrading programme in the industrial sector. A new programme to complement
the PMI in the various fields of intervention has begun. This is the programme to support
corporate competitiveness and to facilitate access to markets PCAM, scheduled for
implementation over the coming four years (2010-2013) with a budget of approximately
23 million euro. The two main areas of intervention are support to businesses and support to
infrastructure dealing with quality. The programme seeks to attain the following three main
objectives :
 - improve the capacity of Tunisian companies to meet the requirements of the European
community market,
 - adapt local infrastructure to European market demand, so as to be in a position to sign
mutual recognition agreements regarding assessment of conformity to quality standards, and
 - prepare Tunisia for possible extension of mutual recognition agreements to other strategic
sectors of the economy.
The upgrading programme in the industrial sector PMN between its start up in 1996 and the
end of 2009 attracted the participation of 4,534 companies, of which 3,092 obtained approval
for financing of their proposed upgrading plans by the steering committee COPIL. Some
                                               65
5,207 MTD in investment were approved, 602 MTD (11.6%) for intangible investment and
719 MTD (13.8%) in the form of State premiums. 270 upgrading proposals were approved in
2009 involving some 600 MTD, compared to 193 plans and 377 MTD a year earlier, corres-
ponding to average investment per company of 2.2 MTD compared to about 2 MTD in 2008.
The upgrading programme for services to industry has since it began in 2000 served
281 businesses, of which 116 proposals for financing of an upgrading plan have been
approved, involving total investment of 58 MTD. State premiums in this area amounted to
14.5 MTD at the end of 2009, corresponding to 25% of approved investments.
Quantitative results for the industrial sector were affected in 2009 by the adverse effect of the
world financial and economic crisis, despite measures taken by the State to support and
foster recovery at export companies and the economy in general. Added value in the sector
dropped by a slight 0.3% in real terms, after increasing by 2.1% in 2008 and 9.9% in 2007.
Its contribution to economic growth was thus -2.5% vs. +13.4% a year earlier.
TRENDS IN ADDED VALUE IN CONSTANT PRICES OF THE PREVIOUS YEAR                                         (In %)
           Description                       2005           2006                2007    2008       2009
Non manufacturing industries                  4.2            -0.2               13.8      0.2       3.7
Mining                                        5.7            -9.8               -5.4     -4.0      -1.6
Energy                                        1.7            -4.4               21.5     -3.5       3.4
 of which : Oil and natural gas               1.1            -5.7               28.4     -5.1       3.5
Building and civil engineering                6.6             6.5                6.0      6.6       5.5
Manufacturing industries                      1.5             3.2                7.3      3.5      -3.3
Overall industrial sector                     2.6             1.8                9.9      2.1      -0.3
                                              Source : Ministry of Development and International Cooperation

Consequently the industrial sector’s share in nominal GDP fell from 30.4% in 2008 to 28.8% in
2009, with 13.2% for manufacturing industries and 15.6% for non manufacturing industries. This
drop was due to an overall growth rate of -3.3 in real terms for manufacturing industries
compared to 3.5% growth a year earlier, in the wake of lower foreign demand. Growth in non
manufacturing industries went up to 3.7% in real terms vs. 0.2% in 2008, thanks to recovery
in the energy sector.

                        TRENDS IN ADDED VALUE IN THE INDUSTRIAL SECTOR
                               (In constant prices of the previous year)
   25                                                                                                  25

   20                                                                                                  20

   15                                                                                                  15

   10                                                                                                  10

    5                                                                                                  5

    0                                                                                                  0

   -5                                                                                                  -5

  -10                                                                                                  -10
     2002        2003           2004         2005         2006            2007         2008        2009
                 Overall industrial sector           Manufacturing industries             Energy


                                                    66
Lower activity in manufacturing industries was attributable to exports that fell by 13.7% in
2009 after increasing by 19.8% the year before, coming to about 16,161 MTD or 83% of the
country’s overall exports. If energy, phosphates and other mining products are included,
exports by the industrial sector came to 18,889 MTD, a decrease of some 18% following an
increase of 22% a year earlier, very near the 2007 figure.
INDUSTRIAL SECTOR SHARE IN GDP IN CURRENT PRICES                                                   (In %)
         Description                2005              2006        2007          2008           2009
Non manufacturing industries        10.8              11.0         11.9          13.2           13.2
Mining                               0.6               0.6          0.6           1.1            1.0
Energy                               5.7               6.0          6.9           7.9            7.8
 -Oil and natural gas                4.3               4.7          5.7           6.7            6.5
 -Electricity                        1.0               1.0          0.9           1.0            1.0
 -Water                              0.4               0.3          0.3           0.2            0.3
Building & civil engineering         4.5               4.4          4.4           4.2            4.4
Manufacturing industries            15.7              16.2         16.8          17.2           15.6
Agrofood industries                  2.7               2.7          2.8           2.7            2.6
Manufacturing industries other
 than agrofood                      13.0              13.5         14.0          14.5           13.0
 -Building materials, ceramics
  and glass                           1.5              1.5          1.5            1.4           1.4
 -Mechanical and electrical
  industries                          3.2              3.7          4.1            4.3           3.7
 -Textiles, clothing, leather
  & footwear                          4.3              3.9          3.9            3.6           3.0
 -Chemical industries                 1.5              1.5          1.6            2.3           2.0
 -Oil refining                        0.5              1.1          1.1            1.1           1.1
 -Tobacco industry                    0.1              0.1          0.1            0.1           0.1
 -Miscellaneous industries            1.9              1.7          1.7            1.7           1.7
Overall industrial sector           26.5             27.2           28.7          30.4           28.8
                                            Source : Ministry of Development and International Cooperation

There was some 772 MTD in foreign direct investment flows FDI in manufacturing industries
in 2009, up from 642 MTD in 2008, an increase of 20.2%. This trend was in contrast to
diminishing FDI in the energy sector, down by 36.2% from 1,934 MTD in 2008 to 1,234 MTD
in 2009 because of lower world prices. Despite the financial crisis, FDI went up in key sectors
of Tunisia’s economy, particularly for mechanical/electrical industries (209 MTD vs. 102 MTD
in 2008) and textiles/clothing (99 MTD vs. 50 MTD).
Given these FDI flows, gross fixed capital formation GFCF in the industrial sector went up by
0.9% in 2009 to 4,820 MTD or 34.3% of overall investment compared to 4,775 MTD and
36.7% in 2008. The investment rate for the sector remained virtually unchanged at 28.4%.
Breakdown of investment by sector shows a 3.4% increase for non manufacturing industries
and 4.5% drop in manufacturing industries, compared to respective increases of 28.5% and
19.1% a year earlier.
A. MINING ACTIVITY
With a drop in production of lime phosphate and iron ore, the mining sector in 2009
continued to post negative growth for the fourth straight year. Added value was down by
1.6% in real terms, following a drop of 4% in 2008. Still, after stagnating a year earlier,
investment in the sector was up by about 40% to 139 MTD, 103 MTD of which were
attributable to the public sector vs. 59 MTD in 2008. Exports of mining products (more than
                                                 67
60% of which were lime phosphate) fell by 56% to about 90 MTD due to a sharp drop in
prices for this product on the international market.
MINING PRODUCTION
                                             In thousand tonnes                                Variation
    Description                                                                                2009/2008
                          2005          2006           2007          2008          2009          in %
Lime phosphate            8,220         7,801         8,002          7,539            7,298         -3.2
Iron ore                    206           214           180             211             151        -28.4
Lead ore                   13,6             0             0               0               0
Zinc ore                   29,2             0             0               0               0
Aluminium fluoride         42,1          42,5          42,1            42,8            40,3         -5.8
Sea salt                  1,132         1,127           933          1,063            1,395         31.2
  Of which: COTUSAL         710           753           722             808             901         11.5
                               Source : Directorate General for Mining (Ministry of Industry and Technology)

1. LIME PHOSPHATE
In the wake of lower foreign demand, extraction of lime phosphate by the Gafsa phosphate
company CPG decreased in 2009 by 3.5% compared to the previous year’s figure and by
12.5% compared to initial projections, bringing the figure to 11.2 million tonnes. The mining
centres of Kef Eddour, Kef Eschfaier and Jallabia remained the main sites with respective
shares in overall tonnage of some 28%, 21% and 12%. Production of marketable phosphates
fell by 3.2% to 7.3 million tonnes, corresponding to a virtually unchanged average yield of
65.2% (vs. 64.7% in 2008). Most of production came from the washing sheds at Metlaoui
(26.3%), Mdhilla (25.7%) and Kef Eddour (25%), while the remainder came from the washing
sheds at Redeyef and Moulares.
At the level of marketing, overall sales of phosphates continued to drop, down from
6.8 million tonnes in 2008 to 6.1 million in 2009. Of this total, 5.6 million tonnes were shipped
to Tunisian chemical group GCT plants for processing into phosphate-based products,
compared to 5.9 million tonnes in 2008. 491,000 tonnes were exported (worth 54.9 MTD),
representing decreases of 44.2% and 69.6% compared to the previous year’s figures. Lower
sales brought about higher stocks, amounting to 6.6 million tonnes of marketable phosphates
and 1.1 million tonnes of raw phosphates as of the end of 2009, up from 5.7 million and
0.9 million tonnes respectively at the end of 2008.
2. IRON ORE
Production of iron ore in 2009 posted a considerable drop of 28.4% to 151,000 tonnes, a
record low, due to natural exhaustion of reserves. The Jerissa field experienced a 4.2%
decrease in production, providing about half of overall production by supplying 66,000 tonnes
of hematite (iron ore in its pure form) and 10,000 tonnes of iron carbonates. Similarly,
hematite extracted at the Tamera-Douaria mine came to 75,000 tonnes, down from 80,000 a
year earlier.
Local sales of iron ore fell by 28.2% to 140,000 tonnes, with 75,000 tonnes coming from the
Tamera-Douaria mine. The volume of exported quantities remained marginal at just 10,000 tonnes
of iron carbonate. 8,500 tonnes of iron ore were imported, down from 25,400 tonnes in 2008,
shipped to the El Fouladh plant. It should be noted that to meet domestic needs in 2009, it
was necessary to import cast iron, iron and steel at a cost of 749 MTD vs. 1,407 MTD the
year before.

                                                  68
3. NON FERROUS METAL
With the en of production of lead and zinc since 2006 after reserves gave out, the only
production of non ferrous metals in 2009 was aluminium fluoride, production of which in 2009
fell by 5.8% below the 2008 figure to 40,300 tonnes. Of this total, 40,000 tonnes were
exported, for a drop of 6.5%.
4. SEA SALT
Provided for the most part by the Tunisian salt company COTUSAL, production of sea salt
rose in 2009 by about 31% to 1,395,000 tonnes. Production by private companies increased
by almost 94% to 494,000 tonnes, compared to 255,000 in 2008. TUNISEL company in
particular produced 359,000 tonnes of salt compared to just 97,000 tonnes a year earlier,
corresponding to about a quarter of national production.
As in the past, sea salt sales were mostly to foreign markets, with export of 1,260,000 tonnes,
of which 807,000 tonnes were handled by COTUSAL. This compares to 1,031,000 and
773,000 tonnes respectively a year earlier. These exports served mainly to melt snow on
roads in Europe over the winter, particularly in France. Sales on the local market went up by
5.4% to 113,000 tonnes.
B. ENERGY
The balance of primary energy continued to post a deficit, amounting to 700,000 tonnes of oil
equivalent (toe) in 2009 vs. 663,000 a year earlier, since supply remained at about the same
level as in 2008 while demand went up slightly. Virtual stagnation in resources (+0.1%) was
due to drops in both oil production and gas royalties, offset by the higher volume of natural
gas produced. Slow growing demand (+0.6%) was due in particular to lower consumption of
oil products (-3.8%), while natural gas consumption rose by 5%. Thus the rate of energy
independence, defined as the ratio between production and consumption of primary energy,
remained fairly stable at 91.2% in 2009 vs. 91.6% in 2008.
BALANCE OF PRIMARY ENERGY
                                                  In thousand tonnes of oil equivalent                Variation
               Description                                                                            2009/2008
                                             2005        2006        2007        2008          2009
                                                                                                         in %
    Resources                                6,794     6,432       7,532     7,238       7,247             0.1
     Crude oil                               3,479     3,345       4,648     4,246       4,003            -5.7
     Natural gas                             3,273     3,077       2,876     2,986       3,230             8.2
     - Production                            2,109     1,923       1,833     1,838       2,258            22.9
     - Royalties                             1,164     1,154       1,043     1,148          972          -15.3
     Others                                     42         10          8         6           14          133.3
    Demand                                   7,337     7,400       7,727     7,901       7,947             0.6
     Oil products1                           4,030     4,129       4,251     4,075       3,920            -3.8
     Natural gas                             3,266     3,261       3,467     3,820       4,012             5.0
     Others                                     41         10          9         6           15          150.0
    Balance of primary energy                 -543       -968       -195      -663        -700             5.6
                                                 Source : Natural Energy Watch (Ministry of Industry and Technology)




1
    Including consumption of coal oil and excluding that of lubricant, tar and white spirit.
                                                            69
In this context, the energy sector’s foreign trade balance posted a deficit of 152 MTD in 2009,
compared to 833.9 MTD the year before. This lower deficit was made possible by imports
that dropped at a faster pace (-43.2%) than exports (-35.3%), mainly because of lower world
prices. The rate of coverage improved by 11.6 percentage points to 94.6%.
ENERGY FOREIGN TRADE BALANCE
                                                                                                       Variation
           Description                  2005         2006        2007         2008        2009         2009/2008
                                                                                                         in %
Balance (In MTD)                       -510.4        -841.4      136.2       -833.9    -152.0             -81.8
Rate of coverage (In %)                  77.5          70.6      104.5         83.0       94.6           11.6 points
                                                                                 Source : National Statistics Institute
Exclusive of oil refining industries (which are now classified under manufacturing industries in
the new national accounting system), growth in the energy sector’s added value in 2009
came to 3.4% in real terms (vs. -3.5% the year before), especially after recovery in the oil
and natural gas branch (+3.5% vs. -5.1%).
1. ELECTRICITY
National electricity production came to some 15 billion kWh in 2009, an increase of 2.5% vs.
4.4% a year earlier. The Tunisian electricity and gas company STEG produced 10.8 billion
kWh or 72% of total, an increase of 5.5% over the 2008 figure. Most of this production
(10.6 billion kWh) was from thermal sources, i.e. 56.6% from steam turbines, 22.4% from gas
turbines, and 21% from the Sousse combined cycle power plant. Natural gas continued to be
the main fuel used in production of electricity from thermal sources by STEG, at 93.7%.
ELECTRICITY PRODUCTION AND CONSUMPTION
                                                                 In million kWh                          Variation
             Description                                                                                2009/2008
                                            2005         2006        2007          2008        2009
                                                                                                           in %
STEG production                              9,162       9,632      10,036        10,250      10,814           5.5
 .Thermal                                    8,975       9,502       9,944        10,173      10,637           4.6
 .Hydraulic                                    145          92          49            38          79         107.9
 .Wind-power                                    42          38          43            39          98         151.3
Private independent production (PIP)         2,905       2,864       3,054         3,440       3,269          -5.0
Autonomous-producers                           939         914         878           895         872          -2.6
National production                         13,006      13,410      13,968        14,585      14,955           2.5
Net trade with Algeria                          -3           5          -8            -7          -6         -14.3
Total energy generated in Tunisia           13,003      13,415      13,960        14,578      14,949           2.5
High and medium-voltage consumption          6,831       6,987       7,225         7,575       7,629           0.7
- Industrial sector                          4,597       4,689       4,814         4,977       5,041           1.3
 .Mining industries                            685         643         680           673         635          -5.6
 .Steel and metal industries                   186         198         207           221         240           8.6
 .Chemical and oil industries                  703         712         707           691         727           5.2
 .Building materials industries              1,187       1,227       1,226         1,332       1,390           4.4
 .Paper and publishing industries              167         167         170           178         185           3.9
 .Textile, clothing, leather and footwear
industries                                     538         540        564          542         503      -7.2
 .Agrofood industries                          486         504        506          546         558       2.2
 .Miscellaneous industries                     645         698        754          794         803       1.1
- Other sectors                              2,234       2,298      2,411       2,598        2,588      -0.4
Low voltage consumption                      4,478       4,704      4,807       5,111        5,391       5.5
Total national consumption                  11,309      11,691     12,032      12,686      13,020        2.6
Exports                                         33           0          0             0         47
Losses in transit and energy in metres       1,661       1,724      1,928       1,892        1,882      -0.5
                                                          Source : Tunisian Electricity and Gas Company (STEG)

                                                        70
Electricity produced from hydraulic and wind sources came to 177 million kWh or 1.6% of
STEG production, compared to 77 million kWh and 0.8% a year earlier. STEG’s production
capacity will expand with start-up of two new wind power plants producing a total of
120 megawatts in Metline and Kchabta (in the region of Bizerte), which are now added to the
plant at Sidi Daoud that has been producing electricity since 2000.
Private independent production (PIP) fell by 5% to 3.3 billion kWh or almost 22% of national
electricity production. Virtually all of this volume (96.5%) was produced at the Rades II power
plant, where installed production power comes to 471 megawatts, the rest coming from the
El Bibene power plant. Similarly, production by autonomous operators was down by 2.6% to
872 million kWh or about 6% of the national total.
Consumption of electricity grew by 2.6% overall to 13 billion kWh, 58.6% of which was
medium and high voltage. Low growth in consumption of electricity in the industrial sector
(1.3%) and a slight drop in other sectors (-0.4%) were in contrast to a fairly sizeable increase
in consumption of low voltage electricity (5.5% vs. 6.3% in 2008). STEG had 3,041,233 clients
subscribed to its low voltage electrical grid as of end 2009, compared to 2,949,001 subs-
cribers at the end of the previous year.

                                   ELECTRICITY PRODUCTION AND CONSUMPTION

                   16,000

                   15,000

                   14,000
  In million kWh




                   13,000

                   12,000

                   11,000

                   10,000

                    9,000

                    8,000
                            2002     2003      2004      2005      2006       2007   2008   2009


                                            Production          Consumption


2. CRUDE OIL
National crude oil production continued to fall in 2009, posting 3.9 million tonnes vs. 4.2 million
the year before. Its share in overall primary energy resources thus fell to 55.2%, down from
58.7% a year earlier, mainly because of lower production at the Adam-Hawa-Dalia (-26.5%),
Didon (-16.8%), Ashtart (-15%) and Oudhna (-15.6%) fields, as reserves gave out. But this
drop was mitigated by increased production at the Cherouk oil field, up from 327,000 to
436,000 tonnes, steady production at El Borma, and the contribution of more minor fields.
Two new off shore fields (Maamoura and Hasdrubal), located in the Gulf of Hammamet and
the Gulf of Gabes respectively, began production in December 2009.

                                                         71
CRUDE OIL PRODUCTION BY OILFIELD
                                                         In thousand tonnes                       Variation
            Description                                                                          2009/2008
                                          2005        2006       2007        2008        2009
                                                                                                    in %
Adam-Hawa-Dalia                             763         792        956            826        607       -26.5
Didon                                       213         233        707            501        417       -16.8
El Borma                                    520         471        439            435        438         0.7
Ashtart                                     530         446        478            494        420       -15.0
Oudhna                                        0          94        708            192        162       -15.6
Cherouk                                       0           0           4           327        436        33.3
Other oilfields (Ouedzar. Franig etc.)    1,378       1,234      1,255          1,379      1,431         3.8
              Total                       3,404       3,270      4,547          4,154      3,911        -5.8
                                Sources : National Energy Watch (Ministry of Industry and Technology) and ETAP

Oil research and exploration activities continued in 2009, but with less interest from foreign
companies because of the drop in world prices for crude oil. There was drilling at 8 wells,
leading to just 3 discoveries, compared to 19 wells and 11 discoveries in 2008. But
exploratory activities enjoyed renewed growth starting the last quarter of 2009, stimulated by
a further increase in the price of crude on the international market. As of the end of 2009
there were 54 valid licenses, after attribution of two new licenses for exploration and one for
research. These 46 research licenses and 8 exploration licenses were held by 57 foreign and
Tunisian companies, in association with the Tunisian oil activities company ETAP acting on
behalf of the State.
As for marketing, shipment of crude oil by ETAP to the Tunisian oil refinery company STIR
remained at about 1.7 million tonnes, 1.1 million tonnes of which were Libyan oil and 0.6 million
tonnes Tunisian crude, noting that the value of oil imports fell considerably by some 41% to
676.2 MTD. Exports went up by 2.7% in terms of quantity to 3.5 million tonnes. In terms of
value, exports posted a drop of 35% to about 2,093 MTD because of lower prices. In effect,
the average price for export of Tunisian crude (all categories combined) went down by some
35% to $60.54 per barrel, compared to $92.96 in 2008.
3. NATURAL GAS
Tunisia’s natural gas resources (production and royalties) went up in 2009 by 8.2% to
3,230,000 tonnes of oil equivalent (toe), corresponding to 44.6% of overall availability of
primary energy vs. 41.3% a year earlier. These resources will increase in the coming years
with the 16 December 2009 start of production at the Hasdrubal offshore field.
National production went up by about 23% to 2,258,000 toe after production started up again
at the Miskar field, coming to 1,412,000 toe (62.5% of overall production), in line with drilling
of new wells and extension of existing production facilities. The Chergui field produced
234,000 toe vs. just 63,000 in 2008, an approximately 10% share of overall production.
Inversely, natural gas royalties from the transcontinental gas pipeline were down by 15.3%
from the 2008 figure to 972,000 toe, under the influence of lower demand for gas in Europe
and limited export capacity in the wake of maintenance of the gas pipeline in the closing
months of 2009.




                                                      72
GAS PRODUCTION AND CONSUMPTION
                              In thousand tonnes of oil equivalent                                   Variation
        Description                                                                                  2009/2008
                           2005     2006     2007       2008     2009
                                                                                                       in %
Production                                  2,109        1,923      1,833       1,838      2,258        22.9
 of which : Miskar                          1,709        1,495      1,421       1,324      1,412         6.6
Total royalties                             1,164        1,154      1,043       1,148        972       -15.3
Purchases                                     511          452        786       1,086      1,006        -7.4
Total availability                          3,784        3,529      3,662       4,072      4,236         4.0
Consumption                                 3,266        3,261      3,467       3,820      4,012         5.0
- Electricity producers                     2,502        2,446      2,526       2,827      2,930         3.6
 .STEG                                      2,010        1,946      1,980       2,233      2,367         6.0
 .Private independent producers               492          500        546         594        563        -5.2
- Other (industrial clients resi-
dential and tertiary sectors)                 764         815        941            993      1,082         9.0
Exports                                       518         268        195            252        224       -11.1
                                    Sources : National Energy Watch (Ministry of Industry and Technology) and STEG
Direct purchase of Algerian gas meant to help meet demand for electricity production was
down by 7.4% to 1,006,000 toe. Overall availability of natural gas was up by 4% in 2009 to
4,236,000 toe, 2,930,000 of which (about 69%) were used to produce electricity by STEG
and private independent producers. Natural gas consumption by other users (industrial
clients, residential and tertiary sectors) grew at a faster pace of 9% vs. 5.5% in 2008 to
1,082,000 toe. Consumption by industrial companies continued to rise, especially in building
materials, chemical and oil industries as well as textiles/clothing, in line with the national
programme to substitute gas for oil products. In this respect, 74 new industrial units were
hooked up to natural gas in 2009. Similarly, there were 69,394 new subscribers to gas
hook-ups in the domestic sector, bringing the total number of clients to 467,107 subscribers
at the end of the year. Availability of natural gas showed an exportable surplus of 224,000 toe
in 2009 vs. 252,000 the year before.
C. MANUFACTURING INDUSTRIES
Activity at manufacturing industries in 2009 was influenced by falling demand from abroad as
a result of the international financial crisis. Thus growth turned negative at 3.3% in real terms
vs. +3.5% in 2008. This drop involved in particular export-oriented sectors (textiles/clothing-
leather/footwear and mechanical/electrical industries), which felt the impact of lower
worldwide. Consequently, the share of manufacturing industries in nominal GDP decreased
from 17.2% in 2008 to 15.6% in 2009.
TRENDS IN ADDED VALUE IN MANUFACTURING INDUSTRIES EXPRESSED IN CONSTANT
PRICES OF THE PREVIOUS YEAR                                             (In %)
                    Description               2005  2006  2007  2008  2009
 Agrofood industries                           -0.8   5.2   6.5   6.5  -1.2
 Manufacturing industries other than agrofood   2.1   2.9   7.4   2.8  -3.7
  -Building materials/ceramics/glass           -0.9   2.6   4.6   5.1   2.5
  -Mechanical and electrical industries        10.6  16.8  17.0   8.4  -6.0
  -Textiles. clothing. leather and footwear    -4.3  -2.8   4.1  -3.1 -10.0
  -Chemical industries                         -0.7  -1.0  -1.5  -2.2  -0.9
  -Oil refining                                89.0 -30.7   8.1   6.8   3.0
  -Tobacco industry                             1.9   2.8   8.7  -1.3  -1.9
  -Miscellaneous industries                     1.4   3.1   4.2   3.9   2.2
 Overall manufacturing industries               1.5   3.2   7.3   3.5  -3.3
                                                    Source : Ministry of Development and International Cooperation

                                                         73
1. AGROFOOD INDUSTRIES
Because of the drop in exports (especially olive oil), agrofood industries in 2009 experienced
a 1.2% drop in added value in real terms, compared to an increase of 6.5% over the past two
years. Share in GDP in current prices went down slightly from 2.7% in 2008 to 2.6%. But
investment rose by 6.7% over the 2008 figure to 288 MTD.
Production of cereal-based products posted slower growth for certain products such as
semolina and pasta and continued to drop for baking flour, while production of animal feed
remained at the same level. As for milk and dairy products, production of industrial milk fell
by 5%, while that of yogurt and cheese grew considerably, by 8.3% and 22.6% respectively.
Good performance in this branch led to lower imports of milk and dairy products, amounting
to 14,700 tonnes worth 44.4 MTD vs. 24,100 tonnes and 79.5 MTD in 2008.
Production of canned goods increased for all products except tomato paste, which fell by
13.8% in 2009 after increasing by almost 41% a year earlier. Production of canned fish
in particular enjoyed significant recovery of 14% (after falling by 7.3% in 2008) to reach
13,000 tonnes, corresponding to 7,000 tonnes of canned tuna and 6,000 tonnes of canned
sardines.
MAIN PRODUCTION OF AGROFOOD INDUSTRIES
                                                                (In thousand tonnes unless otherwise indicated)
                                                                                                   Variation
           Description                   2005        2006        2007        2008       2009       2009/2008
                                                                                                     in %
Cereal-based products
Baking flour                                677         635        725        684          606         -11.4
Semolina                                    556         563        576        672          680           1.2
Pasta                                       186         190        202        223          234           4.9
Couscous                                     58          60         61         67           70           4.5
Animal feed (concentrated)                1,450       1,415      1,500      1,620        1,620           0.0
Milk and dairy products
Industrial milk (in 1,000 hl)             3,470       3,680      3,817      4,210        4,000          -5.0
Yoghurt (in million units)                  884         944      1,190      1,020        1,105           8.3
Cheese                                       17          20         24         31           38          22.6
Canned goods
Tomato paste                                125          79         98         138         119         -13.8
Harissa                                      18        21.1       22.5        24.4        26.6           9.0
Canned vegetables and fruits               21.5        22.3       23.2        24.5        25.9           5.7
Canned fish                                11.3        12.8       12.3        11.4        13.0          14.0
Sugar and candy production
Granulated sugar                            111         136        136         143         108         -24.5
Lump sugar                                 17.6        18.3       18.3        17.5        18.2           4.0
Candy                                        46          45         48          50          51           2.0
Chocolates                                   16        12.3       12.6        14.4          15           4.2
Oil and fats
Olive oil                                   130         210        180         200         160         -20.0
Margarine and vegetable fats                 55        59.6       65.7        71.3        73.5           3.1
Processed seed oil                          120         125        230         270         300          11.1
Beverages
Mineral water (in million litres)            368          456         502        609        552          -9.4
Carbonated beverages (in 1,000 hl)         4,200        4,250       4,333      4,292      4,400           2.5
Beer (in 1,000 hl)                         1,100        1,036       1,104      1,200      1,300           8.3
Wine (in 1,000 hl)                           331          414         197        300        254        -15.3
              Sources : National Statistics Institute, Ministry of Industry and Technology and relevant structures

                                                     74
Sugar and candy production was marked by an increase in lamp sugar as well as candy and
chocolates, compared to a sizeable drop for granulated sugar (-24.5%). 302,000 tonnes of
sugar were imported overall at a cost of 184.1 MTD, -6.8% and +13.4% respectively
compared to 2008 figures.
In the branch of oil and fats, olive oil production in 2009 went down by 20% to 160,000 tonnes,
15,000 of which were processed. This meant an approximately 16% drop in exports, coming
to just 141,700 tonnes worth some 533 MTD vs. 759 MTD in 2008. Production of processed
seed oil and of margarine/vegetable fats rose by 11.1% and 3.1% respectively, down from
17.4% and 8.5% a year earlier. The beverages industry was marked by diverging trends for
the main products. Carbonated beverages and beer increased, while production of mineral
water and wine went down.
2. BUILDING MATERIALS, CERAMICS AND GLASS
Influenced by a slight drop in production of binders (cement and lime), growth in the sector
was slower in 2009, posting some 2.5% in real terms vs. 5.1% the year before, corres-
ponding to a stable share in nominal GDP at 1.4%. Investment fell (by 16.4% to 250 MTD),
as did exports by the sector, down by 7% to about 369 MTD.
Production of cement was down by 0.6% to 7.5 million tonnes, a level corresponding to full
use of installed capacity that allowed for meeting demand on the local market as well as
providing a surplus for export. Some 330,000 tonnes of white cement were produced by the
Tunisian-Andalousian White Cement company SOTACIB in Feriana, 163,000 tonnes of
which were exported (mainly to Algeria and Libya), compared to 316,000 and 168,000 tonnes
respectively in 2008. Thus exports of cement (all kinds taken together) came to 1.1 million
tonnes worth 132.8 MTD or 36% of the sector’s overall exports. Lime production fell slightly
from 369,000 tonnes in 2008 to 361,000 tonnes.
PRODUCTION OF BUILDING MATERIALS, CERAMICS AND GLASS
                                                                          (In thousand tonnes unless otherwise indicated)
                                                                                                                   Variation
                Description                          2005          2006         2007         2008        2009      2009/2008
                                                                                                                      in %
Cement                                                   6,691        6,932        7,052     7,559        7,511        -0.6
 of which : White cement                                   333           333         327        316         330         4.4
Lime                                                       424           401         395        369         361        -2.2
Clay products                                            5,500        5,600        5,800     6,160        6,450         4.7
Marble worked articles(in thousand m2)                  22,200       22,000      22,000     23,200      24,200          4.3
Earthenware tiles (in thousand m2)                      25,000       26,000      26,000     28,000      30,000          7.1
Cement tiles (in thousand m2)                            1,700        1,750        1,800     2,000        2,250       12.5
Hollow glass                                                41             42         43         47          47         0.0
Plate glass                                                 18             18         19         21          22         4.8
  Sources : National Statistics Institute for binding products & Ministry of Development & International Cooperation for the rest
As for other branches of activity in the sector, production continued to rise for clay products,
reaching 6.5 million tonnes on the strength of sustained domestic demand. Similarly,
production of tiling went up by some 6% to 54.2 million square meters, 24.2 million square
metres of which were cement tiles and 30 million square meters earthenware tiles.
Production of marble worked articles rose by 12.5% to 2.3 million square metres. In the glass
industry, production continued to go up for plate glass but it stagnated for hollow glass
(mainly bottles and stemware) to 22,000 and 47,000 tonnes respectively.
                                                              75
                                      MAIN BUILDING MATERIAL PRODUCTION
                       8,000

                       7,000

                       6,000
  In thousand tonnes




                       5,000

                       4,000

                       3,000

                       2,000

                       1,000

                          0
                               2002   2003        2004    2005           2006   2007   2008   2009
                                         Cement          Clay products          Lime


In the area of marketing, exports of ceramic products in 2009 went up by a very high
88.3% in terms of quantity and 16% in terms of value to about 417,000 tonnes worth
109 MTD. And while the sector more or less had the capacity to meet demand, it
continued to import certain semi-finished products and raw materials as well as some
of the products generally used in up-market construction.
Imports cost some 314 MTD, of which almost 119 MTD were for purchase of glass
and worked goods, at levels that increased respectively by 12.2% and 23.8%
compared to 2008. With exports totalling some 369 MTD (-7% compared to the year
before), the sector’s foreign trade posted a surplus of 55.5 MTD compared to a
positive balance of 117.1 MTD recorded a year earlier.
3. MECHANICAL AND ELECTRICAL INDUSTRIES
Constituting one of the Tunisian economy’s key sectors, given its important role in
economic growth, employment and exports, mechanical and electrical industries
were marked in 2009 by fallout from the international financial crisis. Falling foreign
demand led to a 6% drop in added value in the sector in real terms (compared to
+8.4% a year earlier) and thus its share in nominal GDP fell from 4.3% in 2008 to
3.7% in 2009. Still, these industries continued to generate major income from
exports, posting 6,001 MTD or 30.8% of overall export of goods vs. about 6,233 MTD
and 26.3% a year earlier, thus remaining Tunisia’s leading export sector, ahead of
textiles/clothing, energy and phosphate-based products.
Production of steel at the El Fouladh company was marked by start-up of a second
electric furnace in July 2009, bringing annual production capacity for iron bars to
200,000 tonnes. Consequently, manufacture of this intermediary product grew by
22% over the 2008 figure to 100,000 tonnes. Inversely, production of iron rods for
concrete decreased by 5.8% to 98,000 tonnes, which was not enough to cover
overall demand on the local market. With an existing inventory of some 126,000 tonnes,
this company imported some 46,000 tonnes of this product vs. 251,000 a year earlier
in order to meet ever-growing domestic demand. In this respect it should be noted
                                                           76
that the share of private companies in national production and marketing of steel
products has risen considerably over the past few years. Production of metal
structures (mainly electrical pylons for STEG), went up by 50% to 9,000 tonnes, while
that of steel drawn iron dropped by 9.1% to 10,000 tonnes.
STEEL ITEM PRODUCTION
                                          In thousand tonnes                        Variation
      Description                                                                   2009/2008
                           2005        2006        2007        2008       2009
                                                                                      in %
Iron bars                   66          68          61          82         100            22.0
Iron rods for concrete     105         143         110         104          98            -5.8
Drawn iron                  12          12          14          11          10            -9.1
Metal structures             5           6           5           6            9           50.0
                                                                      Source : El Fouladh Company

Automotive assembly industries were marked by privatisation in September 2009 of the
Tunisian automotive industries company STIA, whose activities were taken over by a new
company called «automotive carrossage industries» ICAR. Overall production by these two
companies in 2009 involved assembly of 2,074 pickup trucks, 475 industrial vehicles,
38 buses and standard coaches, and 11 tourism coaches. There was a slight improvement in
the integration rate, which came to 8% for industrial vehicles and pickup trucks and 40% for
buses and coaches, compared to respective figures of 3% and 25% a year earlier.
The automotive parts and equipment industry was affected to some degree by conjunctural
difficulties created by lower foreign demand. Exports of transport material fell by 1.7% in
2009 (following the previous year’s drop of 2.6%) to about 527 MTD, of which 301 MTD were
for frames and spare parts, compared to 537 MTD and 291 MTD respectively in 2008. This
was also the case for electrical and electronic industries, for which exports were down by
2.2% compared to an increase of 20.7% a year earlier to 3,771 MTD. But export of certain
products did go up in 2009, for example exported electrical wires and cables, which
increased in 2009 by 7.3% to about 1,341 MTD or 35.6% of this sector’s exports.
4. TEXTILE/CLOTHING-LEATHER/FOOTWEAR INDUSTRIES
Trends in this sector are closely tied to foreign markets and the impact of worsening
conditions around the world in 2009 in the wake of the financial crisis which had a strong
influence. This brought about lower demand from Tunisia’s main partners, especially in
Europe. Exports fell, quite aside from the repercussions on jobs, and there was a 10% drop
in added value in the sector in real terms, following a decrease of 3.1% in 2008 and renewed
growth of 4.1% in 2007. In effect, foreign trade in the sector was down by 8.9% in terms of
exports and by 7.4% in terms of imports, leading to a drop in share of nominal GDP from
3.6% in 2008 to 3% in 2009. Similarly, investment fell by 50 MTD or 18.2% to 225 MTD.
In the framework of targeted State support to export companies encountering difficulties,
164 companies benefited from incentives and assistance in 2008 and 2009, which was
instrumental in maintaining some 38,000 jobs. Furthermore, the sector took steps to prepare
for the post-crisis period, with a greater number of businesses participating in the upgrading
programme. 146 upgrading proposals were approved in 2009 for investment of 123 MTD, up
from 93 proposals and 101 MTD a year earlier.



                                              77
As for production, spinning, weaving and finishing activities have remained at about the
same level for the past few years. This is because of difficulties that are both structural and
conjuncture in nature that plague the textiles/clothing sector, mainly its low rate of integration
and tough international competition. But these activities will need to take advantage of the
upgrading plans that target more highly skilled human resources capable of higher-level
research and innovation efforts in promising fields with high added value, such as high-tech
textiles (flame resistant, antibacterial…) and upmarket products. In ready-to-wear clothing
and hosiery, production was down by 14.2% and 8.1% respectively, following a drop in
demand from European purchasing groups, which in this period of crisis placed small-scale
orders with near-by countries such as Tunisia. Despite conjunctural decrease in exports,
notably clothing and accessories, textile/clothing industries managed to move up from
subcontracting to co-contracting and finished products. Still, additional efforts must still be
made in the area of innovation if the sector is to move to a higher level. This will be achieved
through development of design, style and pattern activity. Furthermore, it will be necessary to
enhance promotional and marketing action not only on the traditional European markets but
also to try to secure other promising markets in the Middle East, America and Asia.
In this context, the textile and clothing sector continued in 2009 to post a high trade surplus
of some 1,540 MTD (vs. 1.698.5 MTD a year earlier). This represents the main sector whose
trade balance is structurally surplus, ahead of mining/phosphates/phosphate-based products
and leather/foot-wear. Despite tough international competition, Tunisia has remained the fifth
leading supplier to the European Union, with France, Italy, Germany and Belgium as its main
clients. However, the main handicap remains the high degree of reliance on imported inputs
such as bulk cotton and thread/yarn/fabrics, as well as necessary purchases of machines
and equipment.
PRODUCTION OF TEXTILE, CLOTHING, LEATHER AND FOOTWEAR MAIN ITEMS
                                                                (In thousand tonnes unless otherwise indicated)
                                                                                                  Variation
            Description                  2005        2006       2007        2008        2009      2009/2008
                                                                                                    in %
Cotton yarns                              25.0        25.0         25.0       25.0        25.0         0.0
Wool yarns                                 9.0         9.0           9.0       9.0         9.0         0.0
Fabric (million metres)                  200.6       211.2        229.7      220.8       220.8         0.0
Finishing (million metres)                74.0        74.0         74.0       74.0        74.0         0.0
Ready-to-wear clothing (million items)   195.0       171.5        178.0      165.5       142.0       -14.2
Hosiery                                   33.5        32.9         35.4       37.0        34.0        -8.1
Carpets                                    3.3         3.3           3.3       3.3         3.3         0.0
Shoes (million pairs)                     55.2        56.4         62.5       68.0        55.0       -19.1
Footwear accessories                       5.5         5.0           5.0       5.0         5.0         0.0
                                                 Source : Ministry of Development and International Cooperation

After sustained growth over the past few years in leather and footwear industries (largely for
export), there was a decrease of 19.1% in production of footwear and stable growth in
production of accessories. Exports by the sector fell by 9.6% to about 830 MTD, 690 MTD of
which were for footwear and components thereof.
5. CHEMICAL INDUSTRIES
Affected by the drop in world prices for phosphate-based products, this sector posted a drop
of 0.9% in real terms in 2009, after negative growth of 2.2% in 2008. Its share in nominal
                                                      78
GDP thus fell from 2.3% in 2008 to 2%. On the other hand, investment rose by some 11% to
150 MTD or 10.6% of GFCF in manufacturing industries.
Production of phosphate processing industries, the main branch in this sector, continued to
grow, especially for phosphoric acid, diammonium phosphate DAP and ammonium nitrate,
with renewed growth coming to almost 22% for compound fertiliser. Inversely, quantities
went down for certain products such as triple superphosphate and bicalcium phosphate
DCP. Production trends for phosphate-based products were influenced by a sharp drop in
prices on the international market, combined with the accumulation of high stock levels. Thus
exports were down by almost half from their 2008 level (when there was a record jump in
world prices) to reach 1,570 MTD in 2009 with a share in overall export of goods, down from
13.2% to 8.1%.
PRODUCTION OF PHOSPHATE-BASED PRODUCTS
                                    In thousand tonnes                                                        Variation
       Description                                                                                            2009/2008
                          2005   2006      2007      2008                                            2009
                                                                                                                 in %
 Phosphoric acid                                    1,217        1,181        1,140       1,009       1,115         10.5
 Triple superphosphate                                848          801          806         863         747        -13.4
 Diammonium phosphate (DAP)                         1,115        1,093        1,008       1,017       1,124         10.5
 Ammonium nitrate                                     149          153           79         124         155         25.0
 Simple superphosphate                                   9           4            4            0           0
 Hyperphosphate (granules)                              30          26           31           36           7       -80.6
 Compound fertilisers                                   28          15           25           23         28         21.7
 Bicalcium phosphate (DCP)                            100           66           88           72         64        -11.1
 Sodium tripolyphosphate (TPPS)                       141          142          143         112         112          0.0
 Ammonium phosphate                                     17          34            0            0           0
                                               Source : Directorate General for Mining (Ministry of Industry and Technology)

At the same time, the imported inputs needed to process phosphates posted a drop of 13.5%
for non refined sulphur but an increase of 18.3% for ammoniac, reaching about 1,536,000 and
327,000 tonnes respectively. The drop in import prices helped to considerably reduce outlays
for these purchases.

                                      PRODUCTION OF PHOSPHATE-BASED PRODUCTS
                       1,400

                       1,200

                       1,000
  In thousand tonnes




                        800

                        600

                        400

                        200

                          0
                               2002     2003        2004        2005         2006        2007        2008        2009

                                        Phosphoric acid         DAP          Triple superphosphate



                                                                  79
Other branches of activity involved recovery for basic chemical industries and sustained
growth in pharmaceutical industries, while rubber and tire industries went down somewhat.
Para chemical industries posted higher production for its main products, such as paint,
varnish and ink (1.6%), soap (8.7%), glue, and linseed oil (11.1%). To meet needs on the
local market, recourse to imports continued in 2009, notably for pharmaceutical products for
which the cost of acquisition increased by 25.1% to about 575 MTD. Imports rose for rubber
and rubber-based goods (by 2% to 169 MTD), tanning products and paints (by 14% to
172 MTD), essential oils and perfume (by 11% to 128 MTD).
6. OIL REFINING
This activity grew more slowly in 2009, posting 3% in real terms vs. 6.8% the year before, in
line with lower production of fuel by STIR. Investment figures remained unchanged at
40 MTD for the second straight year, compared to 33 MTD in 2007.
FUEL PRODUCTION
                                                  In thousand tonnes of oil equivalent                Variation
              Description                                                                             2009/2008
                                          2005         2006        2007        2008            2009     in %
    Liquefied petroleum gas (LPG)           120         113         105        136           153        12.5
    Petrol                                  226         188         153        156           130       -16.7
      - Premium petrol                      138         113          93         73             1       -98.6
      - Unleaded premium petrol              88          75          60         83           129        55.4
    Paraffin oil                            237         140         134        124            87       -29.8
    Ordinary gas oil                        495         520         570        566           592          4.6
    Fuel oil                                596         592         635        654           594         -9.2
    Virgin naphta                           137         141         221        192           190         -1.0
    Gasoline                                 25          25          23         26            31        19.2
    White spirit1                             9          10          12         13            12         -7.7
    Kerosene                                  0           4           0          0             0
    Total                                 1,845       1,733       1,853      1,867         1,789          -4.2
    In % of consumption                    45.8        42.0        43.6       45.8          45.6       -0.2 point
                                              Source : National Energy Watch (Ministry of Industry and Technology)

Coming to 1,789,000 tonnes of oil equivalent (toe), national fuel production fell by 4.2% after
low 2008 growth of 0.8%. Fuel oil and ordinary gas oil continued to be the main products,
with identical shares of some 33% for each of these two products. And while quantities of
unleaded premium petrol, liquefied petroleum gas LPG, gasoline and ordinary gas oil went
up by varying degrees, production of other products was down, especially for premium petrol,
fuel oil and paraffin oil. In any case, fuel production covered 45.6% of domestic demand,
virtually the same level as in 2008.




1
    Intermediary refined product between petrol and kerosene that serves as a paint thinner.
                                                         80
FUEL CONSUMPTION
                                          In thousand tonnes of oil equivalent            Variation
           Description                                                                    2009/2008
                                   2005        2006        2007       2008       2009       in %
Liquefied petroleum gas (LPG)       511         506         511       513         534         4.1
Premium petrol                      150         130         105        65          13       -80.0
Unleaded premium petrol             273         297         336       378         437        15.6
Standard petrol                      10           1           0          0          0
Paraffin oil                        199         152         128       105          86         -18.1
Kerosene                            221         218         229       235         207         -11.9
Ordinary gas oil                  1,848       1,844       1,825     1,793       1,750          -2.4
Gas oil 50                            0           0          51        79          86           8.9
Fuel oil                            709         759         837       642         512         -20.2
Fuel gas                             19          19          17        15          16           6.7
Coal oil                             90         203         212       250         279          11.6
                 Total            4,030       4,129       4,251      4,075       3,920         -3.8
                                   Source : National Energy Watch (Ministry of Industry and Technology)

National consumption of oil products continued to fall because of greater use of natural gas
instead of fuel oil to produce electricity, along with adverse economic conditions.
Consumption in 2009 posted 3,920,000 toe, a drop of 3.8% compared to the previous year’s
drop of 4.1%. This decrease involved in particular consumption of fuel oil, paraffin oil and
kerosene used by airplanes. Inversely, consumption rose for other products, particularly LPG
and unleaded premium petrol.
7. TOBACCO INDUSTRY
The tobacco industry, handled by the national tobacco and match state owned company
RNTA and the Kairouan plant remained a fairly marginal activity, as reflected in its very low
share in nominal GDP (0.1%) and a limited level of investment (12 MTD in 2009 vs. 10 MTD
a year earlier). Added value in the sector went down for the second straight year (-1.9% in
real terms vs. -1.3% in 2008).
8. MISCELLANEOUS INDUSTRIES
This sector which covers a wide range of activities mainly in the branches of plastics, paper,
wood, cork and furnishings experienced slower growth in 2009 at about 2.2% in real terms
vs. 3.9% a year earlier. Their contribution to nominal GDP has remained stable at 1.7% for a
number of years.
In plastic industries, production grew by 2.8%, down from 4.2% in 2008. Export of plastics
and plastic articles followed the same trend (+4.3% vs. +10.4% a year earlier) to about
395 MTD or 44% of overall exports by miscellaneous industries. Imports for this same
category of products went down by 5.2% to about 1,197 MTD.
Paper industries posted higher production for paper pulp (3.2%) and paper for printing (3%),
which amounted to 12,800 and 24,000 tonnes respectively. There was a sustained increase
in production of paper packaging, at 4.5% vs. 2.6% in 2008.
In wood/cork/furnishings industries, production went up by 5% for construction carpentry and
by 4.5% for particle boards, compared to 3.9% and 4.7% respectively in 2008. For the most
part, exports performed well despite some decrease in sales of cork and cork articles.

                                               81
D. CONSTRUCTION AND CIVIL ENGINEERING
This sector posted a lower growth rate in 2009 of about 5.5% in real terms vs. 6.6% the year
before, the highest growth rate in the industrial sector. Its share in nominal GDP came to
4.4% vs. 4.2% in 2008. GFCF in the sector was up by 6.7% to 240 MTD or 7% of overall
investment in non manufacturing industries.
This sector plays a key role in Tunisia’s economic and social life, since it contributes to
promotion of housing, carrying out of investment initiatives, and creation of jobs, although the
majority are of a temporary nature, involving unskilled labour. In the years to come, the
sector will have to make a qualitative leap, especially in the area of specialised, skilled
manpower and in the kinds of expertise required for Tunisia’s implementation of the large
scale initiatives envisaged in the XIth development plan. Indeed, Tunisia is determined to
meet the challenges inherent in the presidential programme for the period 2009-2014.




                                              82
                                         III. SERVICES
A. TRANSPORT
In line with the drop in maritime freight traffic and passenger air transport in 2009, as foreign
trade and the number of tourists decreased, added value in the transport sector (expressed
in real terms) recorded slower growth, down from 5.5% in 2008 to 0.5%. Its contribution to
economic growth came to just 1.3% vs. 9.6% a year before.
On the other hand, gross fixed capital formation in the sector grew at a sustained rate of
13.9%, up from 12.9% a year earlier, to 2,050 MTD or 14.6% of overall investment.
Maritime transport continued in 2009 to adhere to a policy based on adoption of international
certification norms, targeting a better quality management system. In effect, the merchant
marine and port authority (OMMP) obtained four quality certifications (IS0 9001). The port of
La Goulette confirmed its standing as one of the busiest tourist ports in the world, thank to
development of cruise activity. Ranked 17th in the world by the specialised magazine World
Cruise Destinations out of a field of the top 50 destinations for tourist ships in the world.
In the framework of liberalisation of air transport (open sky policy), which will be completed in
2011, bilateral agreements were signed between Tunisia and Italy and with countries in the
region such as Morocco and Libya. Tunisian air space has also been opened up to airlines
companies from Kuwait, the United Arab Emirates and Qatar. In this context, Tunisair (the
Tunisian airline company) pursued efforts to improve the quality of services, confirmed by its
category A standing in the ranking of the Air Safety and Tourism Observatory in Geneva. It is
one of the most reliable companies in the world, in the same class as major internationally-
renowned airlines.
As for land transport, which evolved on the basis of a strategy based on modernisation and
ongoing improvement of infrastructure, development of mass transport and better service to
users, extension of the metro line to the Manouba university campus was opened in
December 2009.
In the framework of developing a modern urban rail network in the greater Tunis area, the
Tunis rapid rail network company was founded in July 2007 with initial capital of 10 MTD, and
a capital increase in 2009, bringing the total to 55 MTD. This initiative has a global cost
estimated at 3,200 MTD, with the construction of five rail lines1 for a total of about
86 kilometres, to be built in stages. The initial priority stage to lay some 18 kilometres of rail
will be completed in the coming years.
On another front, with a view to promoting logistic activities and multimodal transport, a one
stop-shop was set up at the port of Rades, operational since July 2009, along with
generalised use of the transport single bundle of documentation for operations at this port.
These efforts have helped Tunisia achieve a respectable ranking in the World Bank’s latest
report on trade logistics : first in North Africa and 61st in the world.



1
 This includes the following lines: Tunis-Borj Cedria (23 km), Tunis-Fouchana-Mhamdia (19.5 km),
Tunis-Gobaa-Mnihla (19.2 km), Tunis-Zahrouni-Sejoumi (13.9 km) and Tunis-Bourjel-Ariana Nord (10.5 km).

                                                  83
Furthermore, to improve security and reduce excessive use of vehicles, the time it takes to
get from one place to another as well as costs, the idea of a ‘smart’ transport system using
information and communication technologies (ICT) has become of increasing interest to
mass transit companies (especially public transport companies), seeking more effective and
efficient use of infrastructure and means of transport. Thus almost 70% of the vehicles in the
Tunis transport company (Transtu) have been equipped with global positioning systems
(GPS). The national interurban transport company (SNTRI) has signed an agreement with
the Centre for studies and research in telecommunications (CERT) to provide monitoring of
the movement of vehicles by satellite, along with development of its computer and
communication systems.
1. MARITIME TRANSPORT
The number of ships tying up at Tunisia’s seven commercial ports went down in 2009,
dropping for the second straight year, to 7,832 units. This number went up at the ports of
Rades (+9.7%), Gabes (+10.3%) and Sousse (+31%), but it went down at other ports,
especially Sfax (-10.1%) and Zarzis (-23.7%). However gross tonnage for these ships
increased by 3.7%, to 93.1 million tonnes1.
The structure of ships was marked by higher shares for special ships (up from 27 in 2008 to
28.5% in 2009), bulk carriers (up from 9.8% to 10.5%), containers ships (up from 8.2% to
10.1%), and roll-on/roll-off ships (up from 11.9% to 12.3%). Inversely, shares for other kinds of
ships went down : from 24.8% in 2008 to 21.8% in 2009 for conventional ships, from 8.3% to 8.2%
for car ferries, from 5.9% to 4.8% for cruise ships, and from 4.1% to 3.8% for oil and gas tankers.
NUMBER OF SHIPS ENTERING TUNISIAN PORTS                                                                (In Units)
                                                                                           Variation in %
           Description              2006           2007           2008        2009
                                                                                       2008/2007 2009/2008
    Tunis-Goulette-Rades            2,997          3,066          2,945       2,967         -3.9             0.7
     of which : Rades               1,531          1,583          1,540       1,689         -2.7             9.7
    Sfax                            1,321          1,608          1,792       1,611         11.4          -10.1
    Bizerte                           548            533            557         546          4.5            -2.0
    Gabes                             667            720            599         661        -16.8           10.3
    Sousse                            797            962            983       1,288          2.2           31.0
    Zarzis                            923          1,009            995         759         -1.4          -23.7
                 Total              7,253          7,898          7,871       7,832         -0.3            -0.5
                                                                Source : Merchant Marine and Port Authority (OMMP)

Maritime freight traffic, including shipping along Tunisia’s coast, decreased by a further 7.3%
(compared to -1.6% drop in 2008) to 26.3 million tonnes. This drop was due essentially to the
lower level of international traffic carrying imported merchandise (-11.6% vs. +4.2% a year
earlier). The 14 million tonne drop in this traffic involved in particular imports of non refined
sulphur, cereals, cast iron, iron & steel, and fuel.
The volume of shipped merchandise remained more or less stable (+0.3% vs. a drop of 5.2% in
2008) at 11.2 million tonnes. The increase in exported quantities involved in particular fertiliser
and phosphoric acid.
Coastal shipping between Tunisian ports (involving in particular transport of hydrocarbons)
continued to fall for the second straight year, posting 534,000 tonnes vs. 668,000 in 2008.
1
    International unit of volume to gage ships, corresponding to 2.83 cubic metres.
                                                           84
This drop concerned mainly transport of crude oil, mostly incoming at the port of Bizerte and
outgoing at Skhira and secondary ports.
TRENDS IN MARITIME FREIGHT TRAFFIC                                                        (In thousands of tonnes)
                                2008                                      2009                Variation in %
        Description
                                       Incoming     Outgoing      Incoming     Outgoing   Incoming     Outgoing
    International traffic                15,853      11,162          14,018      11,200       -11.6         0.3
     Ports of Tunis-Goulette-Rades        5,253       1,498           4,614       1,554       -12.2         3.7
      of which : Port of Rades            4,577       1,271           4,172       1,360        -8.8         7.0
     Port of Sfax                         2,720       2,273           2,457       2,023        -9.7       -11.0
     Port of Bizerte                      3,540       1,114           3,264         935        -7.8       -16.1
     Port of Gabes                        2,601       1,547           2,318       1,794       -10.9        16.0
     Port of Sousse                       1,545         806           1,247         558       -19.3       -30.8
     Port of Zarzis                         194         594             118         910       -39.2        53.2
     Port of Skhira and offshore
       drilling Platforms1                    0        3,330             0        3,426                     2.9
    Coastal2                                668          668           534          534      -20.1        -20.1
     Ports of Tunis-Goulette-Rades            7            0             0            0     -100.0
      of which : Port of Rades                7            0             0            0     -100.0
     Port of Sfax                            41           58            28           42      -31.7       -27.6
     Port of Bizerte                        606           48           506            0      -16.5      -100.0
     Port of Gabes                            6            0             0            0     -100.0
     Port of Sousse                           0            0             0            0
     Port of Zarzis                           8            0             0            0     -100.0
     Port of Skhira and secondary
      ports                                   0         562               0         492                    -12.5
                        Total            16,521      11,830          14,552      11,734      -11.9          -0.8
                                                               Source : Merchant Marine and Port Authority (OMMP)

Tonnage of merchandise transported by the Tunisian navigation company CTN went down
by 13.2% in 2009 to 1,631,000 tonnes, representing 6.5% of maritime commercial traffic
exclusive of coastal shipping. This drop was attributable to lower volume in clients’ special
requests for transport (about -20%) as well as that handled by regularly scheduled lines
serving the Mediterranean (-12%). 43.8% of the transport handled by CTN was on its own
ships, while 56.2% used chartered ships.
The share of private operators in martime freight traffic continued to increase, but it remained
at a low level. The Gabes marine tankers company, which is specialised in the transport of
phosphoric acid, carried 203,000 tonnes of freight in 2009, up from 158,000 tonnes the year
before. This increase also held for the Africa marine company, which transported a volume of
313,000 tonnes vs. 131,000 a year earlier. This increase took place after chartering three
new ships to boost the fleet handled by CTN. Thus its fleet at the end of 2009 was made up
of six ships, only one of which was its own property.
Contrary to merchandise traffic, maritime passenger transport incoming and outgoing at the
country’s various commercial ports recorded an overall increase of 4.5% in 2009, compared
to a drop of 0.4% the year before, amounting to 720,000 passengers of which 378,000 were
incoming. The port of Tunis-Goulette continued to handled virtually all passenger traffic :
714,000 passengers or more than 99% of total.

1
    Crude oil only.
2
    Coastal shipping here involves only national commercial ports. But since the number of entries of merchandises
    is higher than exits, the gap is absorbed under the heading “Port of Skhira and secondary ports”.
                                                        85
                INTERNATIONAL MARITIME MERCHANDISE TRAFFIC BY PORT

                      1999                                                  2009
  Bizerte                                Gabes          Bizerte                                  Gabes
   20%                                    17%            17%                                      16%




                                                                                                  Others
  Sfax                                   Others         Sfax                                       25%
  22%                 Tunis-              19%           18%                Tunis-
                     Goulette                                             Goulette
                     -Rades                                               -Rades
                       22%                                                  24%


Similarly, passengers travelling with their vehicles went up by about 8% over the previous
year’s figure to 269,000 vehicles : 145,000 incoming and 124,000 outgoing, compared to
133,000 and 116,000 respectively in 2008. The difference between incoming and outgoing
vehicles is basically due to vehicles being definitively imported by Tunisians resident abroad,
which came to some 21,000 units vs. 17,000 a year earlier.
THE NUMBER OF PASSENGERS RECORDED AT THE PORT OF TUNIS-GOULETTE
                                                                              (In thousands of passengers)
                                                                                 Variation in %
      Description               2006   2007            2008       2009
                                                                             2008/2007    2009/2008
Passenger incoming               349   350             355         373            1.4            5.1
Passenger outgoing               304   333             332         341           -0.3            2.7
       Total                     653   683             687          714           0.6              3.9
                                                       Source : Merchant Marine and Port Authority (OMMP)

CTN’s share in traffic of passengers and passengers travelling with their vehicles went down
slightly. In 2009 they carried 312,000 passengers (43.3% of total) vs. 314,000 (45.6%) in
2008. As was previously the case, virtually all of this traffic was on the Tunis-Marseille and
Tunis-Genoa routes, at respective shares of some 47% and 52%. This company’s share in
transporting passengers travelling with their vehicles went down by four percentage points to
42.4% with 114,000 vehicles, down from 116,000 a year earlier.
The new Kerkennah transport company SONOTRAK transported 1.5 million travellers in
2009, down by 2% from the 2008 figure. On the other hand, the number of vehicles
transported by this company went up by 4% to 233,000 units.
Tourist cruise traffic, despite a drop of 18.8% in the number of ships moored at the country’s
various ports, went up by 8.1% in 2009 in terms of number of tourists, coming to 758,500, after
dropping by 6.5% a year earlier. Virtually all this traffic continued to go through the port of La
Goulette, which handled about 95% of the overall number of ships and 99% of the number of
tourists.



                                                  86
2. AIR TRANSPORT
In line with the drop in foreign tourist flows, notably European, and temporary suspension of
the pilgrimage because of the A(H1N1) flu worldwide, air transport activity was down in 2009,
both in terms of number of aircrafts and number of passengers going through the country’s
airports.
The number of aircrafts arriving at and departing from Tunisia’s eight international airports
fell by 4.9% to 103,800 units. This drop involved the main airports except Tunis-Carthage,
where there was a 2% increase. It concerned international charter traffic and domestic lines,
down by 11.7% and 15.1% respectively, while there were 7.3% more regularly scheduled
international flights.
COMMERCIAL AIRCRAFT AND PASSENGER TRAFFIC AT INTERNATIONAL AIRPORTS
                                                                                                                 (In thousands)
                                                                                                      Variation 2008/2009
                                             2008                                  2009
        Description                                                                                           in %
                                         1                     2               1                 2           1               2
                             Aircrafts        Passengers            Aircrafts       Passengers       Aircrafts   Passengers
    Tunis-Carthage              44.0                 4,218.3             44.9         4,257.3           2.0            0.9
    Monastir-Skanes             31.2                 4,262.3             28.1         3,831.9          -9.9          -10.1
    Jerba-Zarzis                22.5                 2,621.9             21.1         2,457.1          -6.2           -6.3
    Sfax-Thyna                   7.9                    98.9              6.4            87.4        -19.0           -11.6
    Tozeur-Nefta                 1.6                    74.9              1.6            84.8           0.0           13.2
    Tabarka-November 7th         1.2                    70.6              0.9            54.0        -25.0           -23.5
    Gafsa-Ksar                   0.4                     7.7              0.4              8.9          0.0           15.6
    Gabès-Matmata                0.4                    10.2              0.4            12.3           0.0           20.6
             Total             109.2                11,364.8            103.8       10,793.7           -4.9           -5.0
                                                                         Source : Civil Aviation and Airport Authority (OACA)

Similarly, passenger traffic was down by 5% in 2009 (after going up by 3.3% the year before)
to 10.8 million, of which more than 95% was international traffic. This decrease would have
been higher if it had not been for the slight (0.9%) increase in the number of passengers
going through the Tunis-Carthage airport. The drop in passenger traffic reflected activity at
the airports of Monastir-Skanes (-10.1%), Jerba-Zarzis (-6.3%), Sfax-Thyna (-11.6%) and
Tabarka 7 November (-23.5%). There was increased passenger traffic at the other airports,
particularly Tozeur-Nefta (+13.2%).
Slowing air transport and phased-in liberalisation (open sky) that will favour foreign
companies had a direct impact on activity at Tunisia‘s three airlines : Tunisair, Sevenair and
the Nouvelair group (which was the result of merger between Karthago and the former
Nouvelair at the end of 2008).
In this context, activity at Tunisair fell in 2009, despite expansion of its fleet in early June with
the addition of a new Airbus A-320 for a total of 30 aircrafts. Tunisair logged 91,300 flight
hours, a drop of 6.3% from the previous year’s figure. Thus the number of passengers
dropped by 5.3% to 3.6 million, a third of all air traffic to and from Tunisia. This drop was due
in particular to suspension of the pilgrimage for 2009 and a drop of some 20% in charter
traffic by this company, which involved almost 1.3 million passengers. Furthermore, the

1
    Number of aircrafts recorded upon arrival and departure.
2
    Number of passengers recorded upon arrival, departure and in transit.
                                                                   87
number of passengers on regularly scheduled international lines (including supplementary
flights) remained virtually stationary at about 2.3 million. The aircraft occupancy rate for
Tunisair flights fell by one percentage point to about 69%.
On the other hand, passengers transported by Sevenair went up by 1.4% over the 2008
figure to almost 304,000 travellers. This was due to performance in international traffic
(+17.7%), which more than offset the drop in domestic traffic (-3.9%), which is the company’s
main activity with slightly more than 70% share in overall traffic vs. 75% in 2008. Sevenair’s
operational fleet in 2009 consisted of three ATR72 aircrafts with a capacity of 70 seats each
plus a CRJ 900 aircraft with a capacity of 88 seats, which together logged 7,100 flight hours
vs. 7,700 a year earlier.

                              PASSENGER TRAFFIC BY AIRPORT

                     1999                                             2009
  Monastir-                              Jerba-        Monastir-                         Jerba-
  Skanes                                 Zarzis        Skanes                            Zarzis
   39%                                    23%           36%                               23%




                                                        Tunis-
   Tunis-
                                        Others         Carthage                         Others
  Carthage
                                         2%              39%                             2%
    36%



Karthago, which is part of the Nouvelair group, had at the end of October 2009 (when it
effectively merged its activity with that of Nouvelair) transported some 364,000 passengers,
with its fleet of four planes logging 10,500 flight hours.
Influenced by the lower level of charter traffic, Nouvelair recorded a sharp drop in its
indicators of activity. In effect, the number of passengers as well as the number of flight
hours went down by 18.5% and 13.9% respectively, to 1.5 million passengers and
45,800 flight hours, compared to increases of 1.9% and 11.5% a year earlier. Consequently,
its market share in international charter traffic fell by 1.4 percentage point to 26.5%. Virtually
all of this company’s traffic involved the French, German, Italian and Scandinavian markets.
Commercial freight recorded a drop of 1.5% in 2009, compared to an increase of 15.5% a
year earlier, with the volume of freight loaded and unloaded falling from 19,400 tonnes to
19,100 tonnes. Virtually all traffic (about 96%) continued to go through the Tunis-Carthage
airport. Tunisair’s share came to 9,600 tonnes or more than half of total freight, compared to
10,800 tonnes and 55.7% in 2008.
3. LAND TRANSPORT
a. Rail transport
Rail traffic by the Tunisian national railroad company SNCFT and the Tunis transport
company (Transtu) was marked in 2009 by a drop in both freight and passenger traffic.

                                                  88
All freight carried by rail is handled by SNCFT and it decreased in 2009 by 12.2% to
1.8 billion tonnes-kilometres, corresponding to 9.3 million tonnes. This drop was due for the
most part to a 16.3% drop in transported phosphate tonnage, which is the company’s main
activity with about two thirds of overall traffic. There was a slight increase in traffic for other
products, notably fertiliser and sulphur (1.7%) and building materials (2.4%).
RAIL FREIGHT                                                                           (In million tonnes-kilometres)
                                                                                         Variation in %
            Description                  2007       2008              2009
                                                                                     2008/2007      2009/2008
    Phosphate                            1,598       1,484            1,215              -7.1            -18.1
    Iron ore1                                3           3                3               0.0               0.0
    Building materials                     125         127              130               1.6               2.4
    Fertiliser and sulphur                 223         229              233               2.7               1.7
    Cereals                                 65          50               52             -23.1               4.0
    Energy                                 126         111              104             -11.9              -6.3
    Others                                  57          69               83              21.1             20.3
                  Total                  2,197       2,073            1,820              -5.6            -12.2
                                                                                                    Source : SNCFT

Passenger traffic by rail handled by SNCFT was down by 1.5%, compared to a 1% increase
the year before, coming to 38.6 million users. The drop involved both short distance lines
(-1.5%) and long distance lines (-1.7%).
DEVELOPMENT IN RAIL PASSENGER TRAFFIC                                                           (In million travellers)
                                                                                           Variation in %
                   Description                   2007         2008            2009
                                                                                       2008/2007 2009/2008
    Tunisian National Railway Company
    (SNCFT)                                       38.8         39.2        38.6             1.0         -1.5
     -Long distance routes                         6.1          6.0         5.9            -1.6         -1.7
     -Short distance routes                       32.7         33.2        32.7             1.5         -1.5
    Tunis Transport Company (Transtu)            111.5        110.7       107.4            -0.7         -3.0
                                                                                      Sources : SNCFT and Transtu

Metro activity handled by Transtu decreased in 2009. The number of travellers went down by
3% (vs. a drop of 0.7% in 2008) to 107.4 million, despite extension of metro lines to
El Mourouj and the Manouba university campus.
b. Road transport
Mass transit by road went down in 2009 by 2.2% after more or less stagnating
(-0.4%) a year earlier, coming to about 680 million travellers. This drop was due to the lower
number of travellers carried by Transtu (-7.7%), which was not offset by higher growth in
traffic by regional companies (+1.1%) and private companies (+4.7%).
With a fleet of 1,182 buses at the end of 2009, Transtu transported 254.2 million travellers.
The number of travellers transported by regional companies increased from 395 million to
399.4 million, while the national interurban transport company SNTRI went up by almost 8%
to 4.1 million travellers. SNTRI’s fleet was expanded in 2009 by acquisition of six buses,
bringing the total to 173 units that logged 19.7 million kilometres, up from 18.8 million the
year before.

1
    This includes iron, lead and zinc.

                                                         89
In any case, public mass transit provided by these companies continued to represent the
huge majority of overall traffic : 657.7 million travellers or a 96.7% share vs. 96.9% in 2008.
 Private mass transit, provided by five companies, grew but at a slower rate of 4.7% (vs.
18.3% a year earlier), carrying 22.4 million users. All companies enjoyed a higher number of
travellers except Tunisia urban transport TUT, which posted a 5% drop to 3.8 million. The
drop was related in particular to extension of the metro line to El Mourouj, the area that had
constituted its main zone of activity since 1999.
The number of travellers transported by the urban and suburban transport company TUS
rose in 2009 by 2.6% vs.14% the year before, coming to 11.7 million or about
52% of the overall number carried by private companies, with a fleet logging 12.5 million
kilometres.
The traveller mass transit company TCV provided transport for 3.4 million passengers, a 3%
increase compared to 10% in 2008.
Traffic handled by the two other private companies together (the mass transit company STC
and the interurban comfort transport company STCI) went up by almost 30%, compared to
35% a year earlier.
The other private operators working in road mass transit have enjoyed steady growth over
the past few years. Ministry of transport data show some decrease in the cumulative number
of licenses granted to taxis and collective taxis as well as authorisations for rural transport,
with respective totals of 23,687, 8,088 and 8,382 in 2009. This decrease was attributable
mainly to withdrawal of a number of licenses because vehicles had not been replaced to
meet safety norms and further improve services to users.
Road freight transported on behalf of others continued to grow in 2009, as reflected in the
number of operators, which increased to 1,223 private individuals and 528 corporate entities,
compared to 1,070 and 515 respectively a year earlier. Overall useable transport capacity at
these operators was estimated at 181,600 tonnes for 2009 vs. 166,200 for 2008.
At the international freight road transport TIR, in an environment marked by a drop in trade,
the overall number of authorisations to operate remained more or less stable at 64 (vs. 63 in
2008), with overall useable capacity down from 8,200 tonnes in 2008 to 8,000 in 2009.
B. COMMUNICATIONS
Information and communication technologies (ICT) are a key sector for Tunisia’s economic
growth and higher competitiveness since they create new high added value activities and
boost productivity. Various initiatives have contributed to remarkable results, especially in
pursuit of reforms and more ambitious content, encouraging private initiative and enhancing
the environment for business, developing communications infrastructure, and promoting
remote services and digitally-savvy industries.
The high priority that Tunisia has given to ICTs helped the country earn ranking in the Davos
Economic Forum’s 2009-2010 annual report as first in Africa for the third straight year, fifth in
the Arab world and 39th in the world out of a total of 133 countries in ICT preparedness and
aptitude. Progress in the sector was made possible by structural changes in Tunisia’s

                                               90
economy : more sectors using a high level of technological content and contributing more to
economic growth, investment, as well as creation of jobs (especially for skilled human
resources).
TRENDS IN THE MAIN INDICATORS OF THE COMMUNICATIONS SECTOR
                    Description                   2006   2007                             2008        2009
 Real growth of added value (%)                    15.0   13.4                             16.0         16.0
 Added value in current prices/GDP (%)              3.9    3.9                              4.0          4.3
 Investments (in MTD)                               650    700                              740          800
   - Variation (%)                                 10.9    7.7                              5.7          8.1
   - Share in overall GFCF (%)                      6.3    6.1                              5.7          5.7
 Number of subscribers to land phone
 (thousands)                                      1,268  1,273                            1,239       1,278
 Number of subscribers to mobile phone
 (thousands)                                      7,339  7,849                            8,602       9,754
 Number of phone lines (land and mobile) per
 100 inhabitants                                   85.0   89.0                             94.8       105.2
 Number of subscribers to internet (thousands)    179.4  253.1                            281.3       414.0
 Number of subscribers to internet per
 1000 inhabitants                                  17.7   24.7                             27.1        39.5
 Number of internet users per 1000 inhabitants    127.1  167.7                            269.8       330.4
 Total number of computers (thousands)              635    768                              997       1,231
 Number of public centres of communications
 technology (units)                              12,375 12,275                          11,526       11,339
 Postal coverage (number of inhabitants per post
 office)                                          7,047  7,056                            7,134        7,207
    Sources : Ministry of development and international cooperation and Ministry of communication technologies

The communications sector continued to post significant gains in added value in 2009 : 16%
in real terms for the 2nd year in a row. From one year to the next, its contribution to economic
growth rose by some14% to 20.5%, the equivalent of 0.6 percentage point for 2008 and
2009. Similarly, the sector’s share in nominal GDP rose from 4% in 2008 to 4.3% in 2009.
Investment in the sector posted a 60 MTD (8.1%) increase in 2009, compared to 40 MTD
and 5.7% the year before, to reach 800 MTD. This was reflected in the sector’s share in
overall gross fixed capital formation, which remained at the same level as in 2008 (5.7%).
Jobs in the sector continued to represent a fairly high share in overall created jobs, either
directly or indirectly, given its indirect impact on other sectors of activity.
Thanks to high investment, which reinforced communications infrastructure, the sector
continued to post sustained improvement, both quantitatively and qualitatively. The number
of subscribers to mobile phone service went up from 8.6 million in 2008 to 9.8 million in 2009
and the number of subscribers to landlines rose from 1.2 million to 1.3 million. Thus overall
telephone density went up from 94.8% in 2008 to 105.2% in 2009. Similarly, there were more
and more computers throughout the country, up from 997,000 in 2008 to more than
1.2 million in 2009.




                                                    91
                             GROWTH RATE IN COMMUNICATIONS ADDED VALUE
                               AND CONTRIBUTION TO ECONOMIC GROWTH
                                          (In constant prices)
                  35                                                                                           35

                  30                                                                                           30

                  25                                                                                           25




                                                                                                                    in percentage
                                                                                                                     Contribution
  in percentage
    Growth rate




                  20                                                                                           20

                  15                                                                                           15

                  10                                                                                           10

                   5                                                                                           5

                   0                                                                                           0
                   2000   2001      2002      2003       2004        2005   2006       2007      2008       2009
                           Growth rate in communications                    Contribution to economic growth


Capacity to connect to the internet network was boosted from 11.3 Gbit/s in 2008 to
27.5 Gbit/s in 2009. This increase was made possible by strengthening Tunisia’s
international underground cables system. In particular, a new Hannibal optical fibre
underwater cable went operational at the end of 2009, allowing for use of transmission
capacity that can be upgraded and adapted to the country’s communication needs. This
cable will allow for total security in accessing the worldwide internet network, will help make
internet access more attractive, will facilitate navigating on world web sites, and will help to
better meet the needs of Tunisian businesses that want to develop their export activities,
while also meeting the needs inherent in the rapid increase in the number of internet lines,
especially ADSL high speed lines.
Incentives and measures of a technical nature helped increase the number of subscribers to
internet in 2009 by more than 47% to 414,000. At the same time, the number of internet
users continued to grow, from 2.8 million in 2008 to 3.5 million. This corresponds to an
increase from 270 users per one thousand inhabitants in 2008 to 330 per one thousand
inhabitants in 2009. Similarly, the number of subscribers to the ADSL high speed network
went up considerably, from 114,200 in 2007 to 212,500 in 2008 to some 368,000 in 2009, in
line with higher capacity and successive rate reductions, enacted to encourage
dissemination of a digital culture throughout the country. Besides, more and more web sites
were set up in 2009, increasing from 11.6% the year before to about 56%, corresponding to
more than 10,000.
Furthermore, there was ongoing improvement in the quality of mobile phone services thanks
to programmes and various measures to set up quality control units in each governorate and
a greater role for the national telecommunication commission, which helped reduce traffic
congestion and saturation at busy times. 2009 was also marked by activation of the
conformity control system that monitors effective debit vis-à-vis declared debit, as well as by
launching of a new high speed internet offer for capacity of 4 Mb/s that will be doubled in 2010.
On another front, there was greater competition in the ICT sector in 2009, with attribution of a
license to install and operate a public telecommunications network in Tunisia that will provide
service to landlines, to second and third generation mobile phones as well as the internet.
                                                                92
This license was attributed to Orange Tunisie, which began the marketing of its services in
May 2010. This will undoubtedly contribute to diversification of services and development of
digital content, along with enhancement of a climate of competition, which should lead to
lower costs and provision of higher quality services.
E-government moved ahead with a firm commitment by Tunisian administrations to move to
paperless procedures and documentation and better internet-based electronic services, with
a view to providing services more rapidly, less expensively, and more efficiently. Thus by
2009 most applications in the Administration’s computer common master plan had been
introduced and their use generalised, an integrated administrative network was operational,
and generalisation of administrative structures had begun.
Thanks to efforts by public authorities in this area, Tunisia was ranked first in Africa and 66 th
out of 192 in the world in the United Nation’s e-government index, moving up by 58 places
from its ranking the previous year (124th). This index evaluates the degree to which public
administrations use ICT to enhance their services to economic agents.
Concerning initiatives and businesses that produce digital content, a national excellency
prize in this field was introduced in 2009 to encourage promotion of digital products and
therefore modernise electronic services, notably in administration, education, culture,
computerisation, finance and commerce, by adopting new communication technologies.
Furthermore, reductions of more than 25% in rates for international calls were granted to
producers of digital content. Thus the rebate for producers of digital content or for promoters
of services using the SMS system was increased from less than 50% to 65% minimum, with
a view to promoting production of digital content in the field of high added value services.
A preferential rebate was also granted to producers of high added value cultural and
educational content.
To ensure dissemination of a digital culture throughout Tunisian society by means of a
greater role for civil society, premiums were granted to associations working in this area in
the overall amount of 1.25 MTD.
Electronic commerce has the advantage of a regulatory framework that facilitates its
promotional work, which has high potential for development. But this has met with limited
success. In effect, although the number of sites using the e-dinar increased from 262 in 2008
to 319 in 2009, that of payments via internet from abroad using international cards, came to
just 2,315 transactions vs. 2,899 in 2008. Domestic payments using the e-dinar went up by
some 9% for the second straight year, to 674,600 transactions.
For skill-oriented training (which constitutes the cornerstone of a knowledge-based economy
and higher competitiveness for the Tunisian economy), reforms focused on higher quality
training and the employability of university graduates. This is through adaptation of training
and acquired skills to the needs of the economy, as well as more practical branches and
promising specialisations. In effect, information and communication technology branches
continued to attract a larger number of students, up from 44,900 for the 2007-2008 academic
year to 49,400 for the 2008-2009 academic year. At the same time, the number of graduates
of higher education in this field continued to increase, reaching 9,700, up from 9,100 in 2008.


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Concerning virtual studies, there were more than 86,000 students following integrated
training in this field during the 2008-2009 academic year, including 52,400 students in the
fields of computer studies and the internet.
As for scientific and technological research, a set of measures and reforms was introduced in
2009 that target better performance for the national research system, reactivity to its
economic environment and orientation to work on national priorities. A number of research
projects and programmes in various sectors of activity were carried out. Among these figure
information and communication technologies, which saw the launching of a new research
programme that initially will address computer security. The various programmes and
projects that have been completed helped to increase its share in expenditure for research to
1.25% of GDP.
State efforts to develop and modernise telecommunication infrastructure and to enhance the
business environment helped boost the attractiveness of Tunisia as a site for foreign
investors in ICT. Existing and planned technological complexes in effect constitute a dynamic
platform for hosting businesses and creating jobs in the field of knowledge-based industry
and offshore activities.
The number of private companies that have set up shop at the El Ghezala communication
technologies pole continued to grow, up to 88 at the end of 2009 vs. 70 in 2008 and 51 in
2007. In the framework of expansion of this technopole and increasing its capacity to host
these companies, work to develop technological facilities in Ariana and Manouba continue
and this will help to considerably facilitate the availability of business premises.
As for the national network of regional remote work centres, various facilities have been
made available, especially for equipment and modern very high speed optical fibre networks,
which create favourable conditions for hosting new initiatives. With a view to gradual
extension of this network to all governorates, a new regional remote work centre began
operation in Tozeur, bringing the number of such centres to 8, noting that construction was
completed at two centres and remains ongoing at five other centres located inland.
Moreover, in the framework of the programme to equip major industrial and service zones
with very high speed optical fibre network services, almost 50 zones were equipped with
modern communication infrastructure, allowing them to connect to these networks with
capacity of more than 100 Mb/s. The development of call centres, particularly those dealing
with foreign markets, attests to Tunisia’s attractiveness to foreign investors who seek
opportunities in ICTs. The number of call centres has grown steadily, coming to 225 centres
by the end of 2009 that provide 18,000 jobs. This compares to 203 centres and 17,600 jobs a
year earlier.
Activity at the Tunisian postal service continued to grow, as reflected in :
- development of postal services by use of new technologies to better serve businesses and
the public, with in particular an increase of almost 9% in financial services, accounting for
more than 60% of overall receipts taken in by the national postal authority;
- diversification of products offered, especially marketing of a new investment financial
product «Poste SICAV Tanit» and introduction of a smart card called «e-dinar smart», which

                                               94
can be recharged in several ways, allowing for payment of purchases via internet and
withdrawal of banknotes from cash machines (DAB) ; and
- expansion of the network of postal cash machines (the number of which rose from 88 in
2007 to 104 in 2008 and 122 in 2009) and increase in the number of withdrawals using this
network (up from 3.6 million in 2008 to 5.3 million in 2009).
C. TOURISM
World tourism was marked in 2009 by a fall off in activity that began in the summer of 2008.
Economic recession in industrialized countries (particularly in western Europe), rising
unemployment and a drop in household income in these countries along with propagation of
the A (H1N1) flu all affected world tourist flows. Thus the number of tourists as well as the
receipts they generate went down considerably from 2008 figures, i.e. by -4.3% and -9.6%
respectively. This situation was reflected on trends in tourism in Tunisia, where growth in
foreign currency receipts slowed as the main parameters of activity went down, particularly
non resident bednights.
1. TRENDS IN WORLD TOURISM
There were 880 million tourist entries worldwide in 2009, 39 million less than in 2008 for a
drop of 4.3% after the previous year’s increase of 2.1%. There was a decrease throughout
the first three quarters of the year but mainly the first (-10.4% in terms of annual sliding) and
second (-6.8%) quarters, while the fourth quarter of the year posted a 1.6% increase in
tourist flows. The drop in tourist entries involved all regions except Africa.
While remaining in first place as a world tourism destination with 460 million tourists, Europe
posted a decrease of 5.5% in tourist entries vs. a slight increase of 0.4% a year earlier, with
market share in world tourism falling from 53% in 2008 to 52.3% in 2009. This drop was
attributable to economic recession in the main countries from which tourists come, notably
the United States and the United Kingdom, the latter having also suffered from the impact of
depreciation of the pound sterling. There was a drop in all regions, but especially central and
eastern Europe (+3.2% in 2008 to -9.9% in 2009) as well as northern Europe (-2.9% in 2008
to -6% in 2009).
TRENDS IN WORLD TOURIST ARRIVALS
                                 In millions           Share in %           Variation in %
          Regions                of tourists
                               2008       2009        2008    2009      2008/2007      2009/2008
 Europe                         487        460         53.0    52.3          0.4           -5.5
 Eastern Asia and Pacific       174        171         18.9    19.4          1.2           -1.7
 Americas                       147        140         16.0    15.9          2.8           -4.8
 Middle East (including Egypt)   56         53          6.1     6.0        19.1            -5.4
 Africa1                         45         46          4.9     5.2          4.7            2.2
 South Asia                      10         10          1.1     1.2          2.0           -2.9
                   Total        919        880        100.0   100.0          2.1          - 4.3
1
    Egypt excluded.                                             Source : World Tourism Organisation

Eastern Asia and the Pacific posted a 1.7% drop in the number of tourists (171 million in
2009) vs. 1.2% growth a year earlier. This region was able to keep its ranking of second in
the world with a market share that increased from 18.9% in 2008 to 19.4% in 2009.

                                                 95
Furthermore, southern Asia (where tourism is still not really developed) recorded a 2.9%
drop in tourist entries following a 2% increase in 2008.
There were 140 million tourist entries in the Americas, a drop of 4.8% vs. an increase of
2.8% a year earlier, with a share in world total that remained virtually unchanged at 15.9%.
This drop was due largely to economic recession in the United States, which is both a source
of and destination for tourists. The various regions in the Americas experienced lower tourist
activity, especially North America (-5.7% of tourist entries vs. +2.6% a year earlier).
There was a drop of 5.4% in tourists visiting the Middle East in 2009, after 2008’s
considerable 19.1% increase, posting 53 million. Egypt in particular was hit by a 2.1%
decrease in the number of entries as well as in tourist receipts, coming to 12.5 million tourists
and 10.8 billion dollars respectively.
On the other hand, Africa enjoyed a 2.2% increase in the number of tourist entries (although
this was lower than the 4.7% increase in 2008) to 46 million and a 5.2% market share in
world tourism, up from 4.9% a year earlier. This increase involved North Africa (1.9% vs.
4.8% a year earlier), especially Morocco where tourist entries rose from 7.8 million in 2008 to
8.3 million in 2009, as well as sub Saharan Africa (3.7% vs. 4.1%), especially South Africa
and Kenya. Respective shares in these two sub regions in the overall number of tourists to
Africa in 2009 came to some 38% and 62% respectively.
Tourist receipts at the world scale was down by 9.6% to 852 billion dollars. As for tourist
flows, the majority of this income was recorded in Europe (48.4%), eastern Asia and the
Pacific (22%), the Americas (19.4%), and to a lesser degree the Middle East (5.1%). Shares
for Africa and southern Asia remained very low at 3.3% and 1.8% respectively.
2. TOURIST ACTIVITY IN TUNISIA
a. General trends
As for other tourist destinations, tourism in Tunisia over 2009 was affected by a difficult
international environment, especially economic recession in Europe, the United States and
Japan, which are the main countries from which tourists come. Still, the negative impact of
these adverse conditions was to some degree mitigated by State measures to help the
sector, notably :
     - allocation of additional funds in the amount of 17 MTD for trade promotion, bringing
overall available funding to 57 MTD, the equivalent of 1.6% of tourist receipts in 2009,
compared to 37 MTD (1.1%) in 2008,
      - launching in June 2009 of an additional programme to upgrade hotels, focusing on
intangible aspects, and
      - modernisation of tourism training centres and ongoing promotion of Saharan tourism,
particularly by start up in November 2009 of two new airlines linking Tozeur to Madrid and
Milan.
In this context, added value in tourism, expressed in real terms, showed a slight drop of 0.3%
in 2009, compared to an increase of 4% the year before. The sector’s share in nominal GDP
dropped from 5.1% in 2008 to 5%. But despite this drop, investment in tourism rose by 7.6%
                                               96
(vs. 0.6% in 2008) to 380 MTD or 2.7% of overall gross fixed capital formation. This
investment served mainly to renovate existing hotels, build units in certain regions, and
develop infrastructure in new tourist zones.
Concerning the sector’s upgrading programme, which targets better performance and greater
competitiveness (especially in keeping costs down and enhancing the quality of services to
tourists), 79 applications were approved in 2009, involving some 137 MTD in investment and
17 MTD in premiums.
MAIN TOURISM INDICATORS
                                                                                                 Variation in %
              Description                    Unit           2007         2008        2009
                                                                                              2008/2007 2009/2008
    Real growth of added value                %                 3.5         4.0        -0.3
    Added value in current
    prices/GDP                                %                 5.2         5.1         5.0
    Investments
     -In value                               MTD              351          353         380         0.6          7.6
     -In % of overall GFCF                                    3.1          2.7         2.7
    Direct job creation                      Unit           4,000        1,600           ..      -60.0            ..
    Available accommodation
    capacity (End of period)             1,000 beds            236         239         240         1.3          0.4
    Operational accommodation
    capacity (monthly average)           1,000 beds           198          198         197         0.0         -0.5
    Non resident tourist entries         1,000 pers.        6,762        7,049       6,901         4.2         -2.1
    Overall bednights                    1,000 beds        37,361       38,112      34,624         2.0         -9.2
     -Non resident tourist bednights     1,000 beds        34,546       35,049      31,557         1.5        -10.0
     -Resident bednights                 1,000 beds         2,815        3,063       3,067         8.8          0.1
    Occupancy rate 1
     -Absolute                                %                45.2        44.4       41.7
     -Relative                                %                51.7        52.8       49.1
    Average length of stay                   Day                5.1         5.0        4.6        -2.0         -8.0
    Gross foreign currency receipts
     -In value                               MTD            3,077        3,390       3,472        10.2          2.4
     -Share in current receipts               %              10.8          9.9        11.6
    Expenditure per bednight
     -General average                        TND                89           97        110         9.0         13.4
     -Maghrebians excluded                   TND                81           87         97         7.4         11.5
    Expenditure per tourist
     -General average                        TND                455          481         503         5.7          4.6
     -Maghrebians excluded                   TND                644          688         756         6.8          9.9
             Sources : Tunisian National Tourism Board ; Ministry of Development and International Cooperation and BCT

b. International tourism
(i) Non resident entries
6.9 million tourists visited Tunisia in 2009, a 2.1% drop compared to a 4.2% increase a year
earlier. This decrease was due to the lower number of European tourists (-8.8% vs. 1.5% in
2008), particularly French (-3.6% vs. 4.5%), Germans (-7.3% vs. 1.6%) and Italians (-13.7%

1
    The absolute occupancy rate is calculated with reference to overall bednights and to available accommodation
    capacity, while the relative occupancy rate is determined in relation to the same bednights and the operational
    accommodation capacity.
                                                          97
vs. 0.2%), with these three nationalities together accounting for 59.1% of European tourists
visiting Tunisia vs. 57.5% in 2008. Tourists from England were on the rise once again, up by
8.2% compared to -18.5% a year earlier. Other European tourist flows showed conside-
rable drops, especially for Czechs (-26.2%), Russians (-21.1%), Poles (-15.9%), Spaniards
(-14.3%) and Dutch (-12.6%).
Visitors from the Maghreb, on the other hand, rose by some 8% for the second straight year
to reach 3 million tourists, based on the increased number of visitors from Libya (12.9% vs.
14.4% in 2008), while entries of Algerians and Moroccans fell by 0.7% and 9.4%
respectively. The number of visitors from the Middle East was down in 2009 (-4.8% vs.
+10.5% a year earlier), while that of tourists from North America (USA and Canada)
remained stable at about 36,000.

           NON RESIDENT ENTRIES                                  NON RESIDENT BEDNIGHTS
               (In thousands)                                         (In thousands)

                                   7,049
                                                                           34,086   34,546   35,049
                                           6,901                  33,587
                           6,762                        30,665                                        31,557

                   6,550
           6,378


   5,998




   2004    2005    2006    2007    2008    2009         2004      2005     2006     2007     2008     2009

(ii) Non resident bednights
Non resident bednights in 2009 posted a sizeable loss of 10%, following 2008’s increase of
1.5%. This drop was due for the most part to the lower number of bednights for Europeans
(-10.6% vs. +1.3% in 2008), notably Italians (-20.4%), French (-7.7%) and Germans (-7.3%),
as well as other European nationals except the English (+7.9%). With a relatively weak share
of overall tourist bednights (3.9% in 2009 vs. 3.3% the year before), bednights for visitors
from the Maghreb continued to grow (at 8.3% vs. 5.5% in 2008) to 1.2 million. This increase
involved Libyans (9.4% vs. 18.9% a year earlier) and Algerians (8.4% vs. a standstill).




                                                   98
ENTRIES AND BEDNIGHTS OF NON RESIDENTS BY COUNTRY
                                                                                Variat. 2009/2008
                 Entries (in thousand persons) Bednights (in thousand units)
  Description                                                                          in %
                  2007       2008      2009      2007      2008      2009      Entries    Bednights
Europe            4,048     4,107     3,744    32,192    32,598    29,158         -8.8       -10.6
of which :
 France           1,335     1,395     1,345     8,557     9,158      8,451        -3.6        -7.7
 Germany            514       522       484     6,015     6,099      5,656        -7.3        -7.3
 Italy              444       445       384     3,013     3,010      2,397       -13.7       -20.4
 Great Britain      313       255       276     2,970     2,529      2,730         8.2         7.9
 Belgium            167       169       168     1,724     1,625      1,553        -0.6        -4.4
 Czech Repub        153       126        93     1,421     1,204        831       -26.2       -31.0
 Russia             141       161       127     1,675     1,830      1,408       -21.1       -23.1
 Spain              127       105        90       966       824        719       -14.3       -12.7
 Poland             149       208       175     1,354     1,749      1,509       -15.9       -13.7
 Scandinavia        103       115       105       768       834        807        -8.7        -3.2
 Switzerland        106       106       100       668       644        611        -5.7        -5.1
 Austria             89        73        61       521       358        317       -16.4       -11.5
 Netherlands         86        95        83       573       646        542       -12.6       -16.1
Maghreb           2,564     2,780     2,999     1,085     1,145      1,240         7.9         8.3
of which :
 Libya            1,545     1,767     1,995       286       340       372        12.9          9.4
 Algeria            981       968       961       758       758       822        -0.7          8.4
 Morocco             29        32        29        41        47        46        -9.4         -2.1
Middle East          38        42        40       160       172       141        -4.8        -18.0
America
(USA &
Canada)              34        36        36       245       275       255          0.0        -7.3
Africa,
Maghreb
excluded             25        29        31       115       124       129          6.9           4.0
Miscellaneous        53        55        51       749       735       634         -7.3         -13.7
         Total    6,762     7,049     6,901    34,546    35,049    31,557         -2.1         -10.0
                                                              Source : Tunisian National Tourism Board

(iii) Average length of stay
Because of the drop in non resident bednights at a faster pace than the drop in tourist
entries, the average stay continued to go down, from 5 days in 2008 to 4.6 days in 2009. The
average stay for Europeans went down slightly, from 7.9 days in 2008 to 7.8 days in 2009,
while that of visitors from the Maghreb remained unchanged at 0.4 day.
(iv) Tourist receipts
Tourism is the sector that brings in most of the foreign currency, generating 3,472 MTD in
2009, an increase of 2.4% vs. 10.2% a year earlier. These receipts corresponded to 11.6%
of current receipts in the balance of payments, covering 54.2% of the deficit in the balance of
trade. This compares to 9.9% and 51.3% respectively in 2008. If the exchange effect is
excluded, tourist receipts would show a drop of 2.3%, after increasing by 9.7% a year earlier.
Still, Tunisia’s tourist receipts (the equivalent of 2.6 billion dollars for 2009) remain
considerably below that of competitive tourist destinations, for example Turkey (21.3 billion
dollars), Egypt (10.8 billion dollars) and Morocco (6.6 billion dollars).

                                                99
Average expenditure per tourist rose by 4.6% in 2009 (vs. 5.7% a year earlier) to 503 dinars.
If visitors from the Maghreb are excluded, average expenditure per tourist came to
756 dinars, up from 688 dinars in 2008. Average expenditure per visitor from the Maghreb
came to 174 dinars, with 190 dinars for Libyans and 145 dinars for Algerians. These figures
are well below average expenditure for Tunisia’s main European tourist clients : 1,142 dinars
for Germans, 933 dinars for the English and 670 dinars for French tourists.

                         TOURIST RECEIPTS IN FOREIGN CURRENCY
                                        (In MTD)


                                                                             3,390   3,472
                                                                    3,077
                                                            2,825
                                                    2,611
                2,341                     2,290
        2,095            2,021   1,903




       2000     2001    2002     2003     2004      2005    2006    2007    2008     2009

c. Domestic tourism
Resident bednights remained virtually unchanged in 2009 (+0.1%), compared to an increase
of 8.8% a year earlier. The total was slightly over 3 million, with share in overall bednights up
from 8% in 2008 to about 9%, well below the target of 15%. To make tourism more profitable,
there will have to be a greater effort to promote domestic tourism so that it approaches the
levels prevailing in other countries and reduces the sector’s vulnerability in a climate of
worldwide unrest, while also working to boost international tourism, especially outside of high
season.
d. Analysis of regional tourism
With a total of 34.6 million, 2009 bednights fell by 9.2% after increasing by 2% the year
before, due in particular to drops in the main tourism areas. This was the case in particular
for Jerba-Zarzis (-10.3%), Mahdia (-8.8%), Monastir-Skanes (-8.2%), Yasmine-Hammamet
(-8%), Nabeul-Hammamet (-7.6%) and Sousse (-6.9%). Thus the average occupancy rate
fell by 3.7 percentage points after rising by 1.1 point in 2008 to 49.1%. This drop involved the
main tourist zones but especially Yasmine-Hammamet (-8.8 percentage points), Mahdia
(-5.4 points), Nabeul-Hammamet (-4.3 points) and Sousse (-3.8 points).




                                              100
BREAKDOWN OF BEDNIGHTS AND RELATIVE OCCUPANCY RATE BY TOURIST ZONE
                               Overall bednights                Occupancy
      Zone           2008            2009        Variation in %  rate in %
                          In     In % of     In     In % of
                                                                2008/2007   2009/2008   2008    2009
                       thousand the total thousand the total
Total                   38,112    100.0     34,624    100.0        2.0         -9.2      52.8   49.1
  of which :
Jerba-Zarzis              9,540    25.0      8,561     24.7         5.8       -10.3       62.3 61.6
Sousse                    7,774    20.4      7,239     20.9        -3.3         -6.9      57.6 53.8
Nabeul-Hammamet           6,485    17.0      5,991     17.3         0.9         -7.6      51.7 47.4
Monastir-Skanes           4,127    10.8      3,789     10.9         0.8         -8.2      56.7 54.5
Yasmine-Hammamet          3,118     8.2      2,868      8.3        -0.2         -8.0      54.9 46.1
Tunis-Carthage            2,058     5.4      2,036      5.9         5.1         -1.1      39.1 36.8
Mahdia                    1,900     5.0      1,733      5.0         3.4         -8.8      66.4 61.0
Tabarka-Aïn Draham          640     1.7        582      1.7       12.9          -9.1      33.4 32.0
                                                              Source : Tunisian National Tourism Board

3. IMPACT ON THE MAIN SECTORS LINKED TO TOURISM
The drop in tourism in 2009 influenced trends in the main related sectors : air transport,
handicrafts and domestic trade. In effect, passenger air traffic went down by 5% vs. an
increase of 3.3% a year earlier, which affected growth in the transport sector (0.5% in real
terms vs. 5.5% in 2008). Handicrafts posted drops of 10.2% in initiatives and of 10.5% in jobs
created in 2009 to 6,433 initiatives and 9,247 jobs. The volume of investment in the sector
also fell, by 6.1%, to 18.6 MTD. Indirect export of handicrafts in the form of in-country sales
to tourists was down by 1.4% to 414 MTD, while direct exports rose by 13% to 165 MTD.
Domestic trade was affected in 2009 by overall slowing of Tunisia’s economy as well as
lower tourism activity. Growth in the sector in real terms fell from 5% in 2008 to 3% in 2009.
D. DOMESTIC TRADE
The trade sector continued in 2009 to suffer from the adverse effects of slower economic
growth resulting from the unfavourable conditions caused by fallout from the world financial
crisis. Still, reforms under way since 2004 to upgrade the sector continued, targeting mainly
modernisation of distribution channels and reform of the regulatory and institutional
framework in order to strengthen its role in development.
1. GENERAL TRENDS
New regulatory texts concerning various aspects of trade (notably organising distribution
channels and boosting institutions to ensure smooth running of the sector) were adopted in
2009. The following legal texts were promulgated :
- law n°2009-69 of 12 August 2009 concerning distribution channels,
- decree n°2009-76 of 13 January 2009 defining the mandate and organisation of regional
directorates of trade,
- decree n°2009-417 of 16 February 2009 governing creation of the national services
Council, defining its mandate and operational modalities as well as a unit for objective-
oriented management that acts as the Council’s secretariat and that is in charge of
implementing the services upgrading programme,
- decree n°2009-418 of 16 February 2009 concerning the creation of a national Council to
counter counterfeiting, defining its mandate, make-up and operating modalities,
                                             101
- decree n°2009-634 of 2 March 2009 defining the administrative and financial organisation
of the national consumer institute set up by law n°2008-70 of 10 November 2008, along with
its operational modalities, and
- two published bylaws concerning approval of specifications regarding the organisation of
animal feed distribution trade and Tunisian handicraft trade.
In the framework of its ordinary sessions, the national trade Council examined various
aspects relating to the commercial sector in 2009, notably the situation of supply of sensitive
products.
The Tunisian solidarity bank BTS continued to provide financing to the trade sector,
supporting the implementation of initiatives to upgrade and promote the sector. In 2009 it
provided 13.4 MTD to finance initiatives that could create as many as 2,743 new jobs.
As in past years, many commercial events were organised throughout the country, offering
consumers a wide range of products at attractive prices.
Quantitatively, the trade sector in 2009 experienced slower growth, down to 3% in real terms
compared to 5% the year before and 3.2% in 2007. Its contribution to economic growth came
to 7.6%, the equivalent of 0.2 percentage point.
Investment in the sector maintained its share in overall GFCF at 1.8%, despite slower growth
of 4.2% vs. 13.2% in 2008.
MAIN PARAMETERS OF ACTIVITY IN THE TRADE SECTOR
                Description                     Unit           2007          2008           2009
 Real growth rate                                %                3.2           5.0           3.0
 Investment                                     MTD               212           240           250
  - Variation                                    %                6.0          13.2           4.2
  - Share in overall GFCF                        %                1.8           1.8           1.8
                                        Source : Ministry of Development and International Cooperation

2. MARKET SUPPLY AND DISTRIBUTION CHANNELS
Supply of various products on the domestic market took place in 2009 in a normal manner,
thanks in particular to higher national production, recourse to buffer stocks for certain
sensitive food products, and diversification of supply, which helped meet consumer demand.
In effect, the quantities produced, supplementary imports and tapping of stockpiles helped to
meet the needs of the local market and to keep up with periods of high consumption like the
month of Ramadan and the summer season, thanks to close cooperation between relevant
officials and inter-professional groups. Still, the high level of domestic demand compared to
that of supply for certain food products brought about temporary increases in the prices of
some products such as vegetables, fruits and seafood.
Aside from the food products normally imported (cereals, vegetable oil, sugar, coffee and
tea), there was sporadic recourse to imports of red meat, chicken and turkey to meet
demand mainly from the tourism sector, keeping in mind that potatoes were imported to
cover consumer demand especially during gaps in production. Building up of buffer stocks of
foodstuffs continued in 2009 thanks to incentives to farmers with respect to prices in order to
spread out national production in a judicious manner over the course of the year.

                                             102
The volume of agricultural products sold at the Bir El Kasaa wholesale market was down by
9.2% to about 366,000 tonnes. This drop involved vegetables (-5.2%), fruits (-14.8%) and
seafood (-11.7%), leading to higher retail prices for these items, up by 4.6%, 2.7% and 5.1%
respectively on average.
Still, the increase in the consumer price index for food products grew more slowly, reaching
4.3% in 2009 vs. 6.2% the year before.
Supply of the domestic market in non food products took place in a satisfactory manner,
notably for sensitive products, thanks to higher local production. Supplementary imports
concerned only a few commodities such as iron billets, clinker and animal feed, noting that
prices for most of these products went down in line with falling prices on the international
market.
3. TRENDS IN FINAL CONSUMPTION AND SAVINGS
Overall final consumption was marked in 2009 by slower growth, which came to 4% in
constant prices and 7.7% in current prices compared to 4.8% and 9.5% respectively a year
earlier. Growth was slower for private consumption, which rose by 4% in constant terms
vs. 4.5% in 2008, while the increase in current prices fell from 9.9% in 2008 to 7.8% in 2009.
Similarly, public consumption went up by 4.2% in constant prices and 7.3% in current prices
vs. 6.1% and 8% respectively last year.
Average propensity to consume, expressed as a ratio of total consumption and gross
national disposable income (GNDI), came to 78% vs. 77.7% in 2008, of which 61.8% and
61.5% respectively were for average household propensity to consume.
MAIN INDICATORS OF FINAL CONSUMPTION AND SAVINGS
                Description                Unit                      2007        2008         2009

 Progress of final consumption in current prices        %               8.5          9.5         7.7
  -Public                                               %               7.6          8.0         7.3
  -Private                                              %               8.7          9.9         7.8
 Progress of final consumption in constant prices       %               5.2          4.8         4.0
  -Public                                               %               4.2          6.1         4.2
  -Private                                              %               5.5          4.5         4.0
 Average propensity to consume                        % GNDI           78.4        77.7         78.0
   of which : households                                               61.9        61.5         61.8
  GNDI/Capita                                           Dinar         4,856       5,312        5,641
 - Annual variation                                        %            7.5          9.4         6.2
 Private consumption per capita                         Dinar         3,003       3,267        3,486
 - Annual variation                                        %            7.7          8.8         6.7
 Gross national savings                                  MTD         10,709      12,228       12,941
 - Annual variation                                        %            8.6        14.2          5.8
 - Savings rate                                        % GNDI          21.6        22.3         22.0
                                          Source : Ministry of Development and International Cooperation

National savings grew more slowly, at 5.8% vs. 14.2% a year earlier, affected by the slowing
economic growth that affected per capita income, up by 6.2% (vs. 9.4% in 2008) to
5,641 dinars. Consequently, the savings rate went down slightly, from 22.3% to 22% of
GNDI. Nevertheless, national savings continued to provide the lion’s share of investment
financing : about 92% vs. 94.1% in 2008.




                                              103
                                       IV. PRICES
2009 was marked by pursuit of appropriate monetary and budgetary policies. In effect,
monetary policy continued to focus on keeping prices under control while providing enough
financing to the economy.
At the same time, pursuit of appropriate budgetary policy helped keep prices down, thanks to
more rational current public expenditure and subsidies for basic-need foodstuffs.
In order to protect consumers and maintain their purchasing power, a national consumer
institute (INC) was set up in November 2008 to strengthen existing structures such as the
consumer defence organisation and the competitiveness council. The mandate entrusted to
this institute includes a consumption watch mechanism, contribution to dissemination of a
culture of consumption, and carrying out of analysis as needed to improve the quality of
forecasts and of market monitoring and to provide help so that the action and measures
required to guarantee regular supply of the domestic market, to rationalise consumption, and
to keep prices down are taken in a timely manner.
In this context, price trends in 2009 were marked by slower growth both at the production
and the retail levels. This was attributable to lower world prices for most of the commodities
in the wake of economic recession worldwide and enhanced domestic supply. In effect,
industrial selling prices rose by just 2% (vs. 12.1% in 2008), while household consumer
prices fell from 5% to 3.7%. This slowing would have been even greater if it had not been for
exchange rate fluctuations and their impact on the cost of imports.
There were slower growing industrial selling prices for mining products and manufactured
goods, especially those produced by mechanical/electrical industries and the textiles/clothing-
leather/footwear sector, for which prices fell by 3.9% and 0.9% respectively from 2008
figures, as world prices for industrial raw materials went down and foreign demand
diminished.
Such trends, along with some slowing in household consumption (from 5% in constant terms
in 2008 to 4% in 2009), helped keep retail prices down, especially since handed over inflation
was lower than the previous year : 2.1% vs. 2.9%.
Prices were lower for both those products whose prices are not freely set or regulated (2.7%
on average vs. 5.6% in 2008) and those whose prices are freely set (4.1% vs. 4.6%). Prices
for subsidised goods remained at virtually the same level as the year before. Furthermore,
better supply of agricultural products, more economic control, development of distribution
circuits and the climate of competition reigning on the local market all acted to keep prices
down, despite some acceleration in the second half of 2009.
Annual price sliding came to 4.3% in December 2009, compared to 3.5% in June and 4.1%
in December 2008, this trend being due mainly to food prices, for which sliding when up from
1.8% to 7.2% between March and December.
Compared to Tunisia’s main partner and competitor countries, the inflation gap widened in
2009 to Tunisia’s detriment notably vis-à-vis the industrialised countries of western Europe
where inflation rates had gone down considerably, even yielding negative figures in certain
countries under the impact of economic recession. Compared to African and Middle Eastern
                                             104
countries (with the exception of Morocco and Jordan), Tunisia enjoyed a lower inflation rate
than Algeria, Egypt, Syria, Saudi Arabia, and South Africa. The inflation differential was also
favourable to Tunisia compared to other countries such as Turkey, Argentina and Brazil.
TRENDS IN CONSUMER PRICES IN TUNISIA AND PARTNER/COMPETITOR COUNTRIES (In %)
         Country           2005       2006      2007      2008      2009
   France                              1.9      1.9            1.6               3.2             0.1
   Germany                             1.9      1.8            2.3               2.8             0.1
   Italy                               2.2      2.2            2.0               3.5             0.8
   Belgium                             2.5      2.3            1.8               4.5            -0.2
   Spain                               3.4      3.6            2.8               4.1            -0.3
   United Kingdom                      2.0      2.3            2.3               3.6             2.2
   United States                       3.4      3.2            2.9               3.8            -0.3
   Japan                              -0.3      0.3            0.0               1.4            -1.4
   Tunisia                             2.0      4.5            3.2               5.0             3.7
   Morocco                             1.0      3.3            2.0               3.9             1.0
   Algeria                             1.6      2.3            3.6               4.9             5.7
   Egypt                               8.8      4.2           11.0             11.7             16.2
   Saoudi Arabia                       0.6      2.3            4.1               9.9             5.1
   Jordan                              3.5      6.3            5.4             14.9             -0.7
   Greece                              3.5      3.3            3.0               4.2             1.4
   Portugal                            2.1      3.0            2.4               2.7            -0.9
   South Africa                        3.4      4.7            7.1             11.5              7.1
                                                 Sources : National Statistics Institute, IMF and Eurostat
A. INDUSTRIAL SELLING PRICES
The drop in commodity prices on the world market in 2009, especially for energy and raw
materials, had an impact on trends in production costs in the industrial sector. The result was
a considerably lower increase in the overall industrial selling price index (2% vs. 12.1% the
year before), even a drop in the indexes of the main export sectors such as
mechanical/electrical industries and the textile/clothing-leather/footwear sector, which were
influenced by falling foreign demand, especially from the European Union.
TRENDS IN THE INDEX OF INDUSTRIAL SELLING PRICES (Base 100 in 2000)                                 (In %)
                Description                  2005         2006        2007          2008         2009
General index                                  4.3         7.0          3.3         12.1          2.0
Manufacturing industries                       2.8         4.8          2.2          7.6          1.8
-Agrofood industries                           2.3         4.9         -1.2          6.9          3.6
-Building materials/ceramics/glass             6.0         8.8          6.8          7.1          0.6
-Mechanical and electrical Industries          4.6         6.0        10.0          12.0         -3.9
-Chemical industries                           3.1         5.3          4.0         15.7          0.6
-Textiles/clothing-leather/footwear            0.8         1.2          3.4          5.8         -0.9
-Miscellaneous manufacturing Industries        1.9         2.0          2.0          1.8          5.6
Mining                                         5.2        19.4        11.0         139.0          1.7
Energy                                        12.6        17.2          7.4         16.3          3.1
-Oil products and gas                         19.4        24.4        10.3          15.6          0.7
-Electricity and water                         5.0         9.2          3.1         17.0          6.5
                                                                     Source : National Statistics Institute
Influenced in particular by the drop in world prices for lime phosphate, the mining sector’s
main product, selling prices for mining products went up by just 1.7% in 2009, compared to
139% the year before. In particular, phosphate prices rose by just 1.7%, compared to about
145% in 2008, while that of iron ore continued to fall (-2.4% vs. -7.5%).
Similarly, selling prices in manufacturing industries rose much more slowly, at just 1.8% on
average vs. 7.6% the year before. This was due mainly to lower prices in mechanical and

                                             105
electrical industries (-3.9% vs. 12% in 2008) and the textiles/clothing-leather/footwear sector
(-0.9% vs. 5.8%).
For the mechanical/electrical sector, lower prices were due to the impact of falling foreign
demand and thus of exports. The drop in prices involved mainly tubes and pipes (-23.8% vs.
15.2% in 2008), insulated wires and cables (-17.8% vs. 0.3%), steel industry goods (-16% vs.
24.6%), steel products (-12.6% vs. 41.6%) and metal construction (-7% vs. 8.5%). As for
other products, selling prices grew at a slower pace, even dropping somewhat, aside from
cycles and motorcycles, for which prices went up at a faster pace of 4.3% vs. 3.8% the year
before.
Selling prices in the textiles/clothing-leather/footwear sector fell for the same reasons as in
mechanical/electrical industries. Prices were down for a number of products, notably clothing
(-8% vs. 2.1% in 2008), prepared textile materials and spun goods and yarn (-2.6% vs. 16%),
miscellaneous textile items (-0.4% vs. 0.5%) and hosiery items (-0.1% vs. 2.3%). Moreover,
the prices of other products experienced slower growth such as fabric (0.4% vs. 13.7%),
worked leather (0.7% vs. 5.3%) and textile articles (1.2% vs. 2.2%), while footwear prices
posted slightly higher growth of 0.9% vs. 0.2% in 2008.

                                  TRENDS IN INDUSTRIAL SELLING PRICE INDEX
                                               (Base 100 in 2000)
                   14                                                                                  14

                   12                                                                                  12

                   10                                                                                  10
   In percentage




                    8                                                                                  8

                    6                                                                                  6

                    4                                                                                  4

                    2                                                                                  2

                    0                                                                                  0
                    2002   2003       2004           2005         2006         2007          2008   2009
                                      Global trend                Manufacturing industries


Selling prices in chemical industries went up much more slowly, by just 0.6% vs. 15.7% a
year earlier, mainly because of the sizeable drop in basic chemical product prices (-19.8%
vs. 59.7% in 2008) and slower growth in miscellaneous parachemical products (3.3% vs.
6.3%). Inversely, prices went up to a higher degree for articles made of rubber (20.4% vs.
9.7% a year earlier), dyes/paint/ink/glue (10.9% vs. 6.9%) and soap/detergent/cleaning
products (7.9% vs. 3.8%).
Similarly, selling prices in the building materials/ceramics/glass sector went up slightly, by
0.6% vs. 7.1% in 2008. They were marked by a drop in tile and brick prices (-15.7% vs. 8% a
year earlier) and articles made of marble (-2.3% vs. 10%), as well as by stability in prices for
ceramic tiles for the second year in a row. Price hikes slowed for ceramic articles (1.2%
vs. 4.7% in 2008), glass and glass articles (2.5% vs. 4.2%), cement/lime/plaster (6.5%
vs. 7.2%) and quarry products (5.8% vs. 14.3%). On the other hand, prices increased more
quickly than the year before for articles made of cement and concrete: 9.9% vs. 6.8%.
                                                            106
Contrary to general trends in the other sectors of activity over 2009, selling prices in
miscellaneous manufacturing industries grew at a faster pace of 5.6% vs. 1.8% in 2008. This
trend concerned in particular the price of watches and clocks (26.7% vs. -2.3%), panels and
particle board (14.1% vs. 2.7%), articles made of plastics (10.1% vs. 2.5%) and
framework/construction carpentry (5.7% vs. 3.6%). Inversely, prices dropped for lumber
products (-8.2% vs. 0.9% the year before), paper pulp and cardboard (-1.1% vs. 2.1%), and
articles made of cardboard and paper (-0.9% vs. 1.4%). There was also slower growth in the
selling prices of miscellaneous manufactured products (2.3% vs. 3.9% the year before) and
stagnation of prices for newspaper and publishing products, after increasing by 2.1% in 2008.
Selling prices in the energy sector grew at a much slower pace in 2009: 3.1%, down from
16.3% the year before. This was because the price of water remained at the same level while
that of oil and gas went up just slightly (0.7% vs. 15.6% in 2008) and by a lower increase
than the year before for electricity prices (7.9% vs. 20.6%). This trend was favoured by the
drop in world energy product prices.
B. HOUSEHOLD CONSUMER PRICES
The general index of household consumer prices (base 100 in 2000) posted a more
moderate increase in 2009 than the year before (3.7% vs. 5%), despite the appearance of
some pressure over the second half, particularly for certain food items.
For the year as a whole, 2009 food product prices rose by an average of 4.3%, compared to
6.2% in 2008, a trend that reflects significantly slower growth in prices for processed food
(3.7% vs. 8.5%). Inversely, agricultural product prices posted slightly faster growth (4.8% vs.
4.2% a year earlier) under the impact of temporarily insufficient production of a few products
such as red meat and certain vegetables.
TREND IN THE GENERAL INDEX OF HOUSEHOLD CONSUMER PRICES.(Base 100 in 2000)    (In %)
                                In terms of annual slide               Yearly
    Description
                                                                      averages
                             Dec. 2008 Mar. 2009   June 2009   Sept. 2009    Dec. 2009
                             Dec. 2007 Mar. 2008   June 2008   Sept. 2008    Dec. 2008       2008     2009
                                                                                             2007     2008
General index                   4.1       3.1            3.5       4.3           4.3         5.0       3.7
Food                            3.1       1.8            3.7       6.2           7.2         6.2       4.3
Housing                         6.2       4.7            3.2       2.6           1.9         5.8       3.3
Clothing                        4.0       1.9            2.3       3.2           1.1         2.4       2.2
Cleaning health and perso-
 nal care                       5.7       4.5            3.8       3.6           2.4        4.6         4.0
Transport & Communications      5.0       3.0            3.3       1.3           1.3        5.2         2.4
Leisure. culture & misc.        2.2       4.4            4.6       5.5           6.5        2.9         4.9
                                                                         Source : National Statistics Institute

Prices were down especially for oil (-8.5% vs. 12.2% in 2008) and growth slowed for cereals
and cereal-based products (2.9% vs. 7.5%), eggs (3.5% vs. 12.1%), milk and dairy products
(6.8% vs. 14.8%), vegetables (4.6% vs. 6.6%), and fruit (2.7% vs. 3.4%). On the other hand,
there were higher price increases for meat, slaughters and poultry (6.9% vs. 2% the year
before), sugar and sugar-based products (12.4% vs. 3.7%), and salt and condiments (8%
vs. 4.3%). Higher prices for red meat were caused by insufficient fodder production, meaning
farmers had to pay more for cattle feed. The higher price of sugar was due to soaring
international prices.

                                                   107
In any case, the influence of higher foodstuff prices on the increase in the general index of
household consumer prices was lower in 2009: 42% (almost 1.6 percentage point) vs. 45%
(some 2.3 points) the year before.
Exclusive of food, the inflation rate fell from 4.2% to 3.3% from one year to the next, following
slower growth in the price of regulated products (2.4% vs. 4.8%), while price increases for
unregulated products remained at the same level as the year before, i.e. 3.8%.
Exclusive of energy, the inflation rate in 2009 came to 3.9%, down from 4.5% the year
before. Exclusive of food and energy, prices rose by 3.6% vs. 3.3% a year earlier, with
energy prices going up by just 1.7% vs. 12.7% in 2008. This means that if volatile products
like food and energy are excluded, the level of inflation remains relatively stable and very
much in line with projections.

                                      TRENDS IN THE INFLATION RATE
                  7                                                                         7

                  6                                                                         6

                  5                                                                         5
  In percentage




                  4                                                                         4

                  3                                                                         3

                  2                                                                         2

                  1                                                                         1

                  0                                                                         0
                  2002   2003       2004       2005         2006    2007         2008   2009


                                Global trend            Foodstuff          Housing


Housing prices followed the same trend as that of food products, with an increase of 3.3% on
average vs. 5.8% in 2008. This was attributable mainly to a lower increase than the year
before in the prices of energy products that are part of this item (2.3% vs. 10%), housing
maintenance and repair (4.1% vs. 6.4%), furnishings (3.9% vs. 4.9%), as well as rent and
utilities (3.6% vs. 4%). Inversely, prices for furniture and bedding and those of household
appliances rose more rapidly than in 2008 (from 3.7% to 4.1% for the former and from 0.7%
to 2% for the latter), while the increase in prices for tableware and kitchen utensils (+5.3%)
was identical to the previous year’s figure.
In the area of clothing, prices showed a moderate increase of 2.2% in 2009, vs. 2.4% in
2008. This trend, favoured by lower prices during sale periods, was influenced mainly by
clothing. But prices for clothing accessories and second hand clothes went up at a faster
pace, from 5.3% to 6.2% and from 1.5% to 6.5% respectively. Footwear prices increased from
1.5% to 4%.
Similarly, prices for transport and communications went up slightly in 2009, posting 2.4%
vs. 5.2% the previous year. This was due to lower fuel rates in January 2009, following lower
world prices and ongoing decreases in postal and telecommunication rates (-3.3%
                                                      108
vs. -12.6% in 2008). Mass transit rates went up more slowly (3.3% vs. 4.8% a year earlier),
as did the cost of personal transport (2.4% vs. 8%).
Prices for cleaning/health/personal care posted a lower increase than in 2008 : 4% vs. 4.6%.
There was slower growth for all products but particularly personal care and medicine (2.5%
vs. 3% a year earlier), toiletries (4.9% vs. 6.3%) and health services (5% vs. 5.8%). Cleaning
products and detergents posted slower growth but the figure still increased at a fairly high
rate of 6.9% vs. 7.2% the year before.
Prices for leisure activities/culture/miscellaneous were the only category to have experienced
faster growth in 2009, up from 2.9% in 2008 to 4.9%. This trend was due in particular to
higher prices for tobacco and cigarettes (8.5% vs. 1.3% the previous year) and for beverages
and meals taken outside the home (6% vs. 4.4%), along with expenditure for cultural
activities (5.3% vs. 3.1%). Inversely, prices for leisure goods and activities continued to drop
(-1.8% vs. -5% in 2008), while those relating to education grew at a slower pace of 2.5% vs. 5.6%.
In terms of annual sliding, the general index of household consumer prices came to 4.3% in
December 2009, compared to 4.1% in December 2008. This was due mainly to faster growth
in food prices (7.2% vs. 3.1% a year earlier) and in leisure/culture/miscellaneous (6.5%
vs. 2.2%). Starting in May 2009, this index began to climb somewhat faster than at the
beginning of the year, due mainly to recovery in world commodity prices and pressure on the
prices of certain food products.
In terms of annual sliding, the increase in the general index of unregulated products came to
5.1% in December 2009, compared to 3.9% in December 2008, a faster rate that concerned
foodstuffs exclusively (7.8% vs. 2.9%), while the increase in the prices of non food products
that are freely set slowed from 4.7% to 3.1%.
For products that are not freely set or regulated, annual price sliding grew at a much lower
rate of 2.5% vs. 4.1% in December 2008, influenced by the slower pace of prices for non
food products (1.7% vs. 4.7%). Regulated prices for foodstuffs rose at a faster pace than a
year earlier : 5% vs. 3.7%.
TRENDS IN PRICE SLIDE BY REGIME                                                    (Base 100 in 2000)
                                   Variation (%)                    Contribution (% points)
      Description         December 2008     December 2009      December 2008       December 2009
                          December 2007     December 2008      December 2007       December 2008
Unregulated goods             3.9                5.1                2.7                   3.5
.Food                         2.9                7.8                0.8                   2.2
.Non food                     4.7                3.1                1.9                   1.3
Regulated goods               4.1                2.5                1.4                   0.8
.Food                         3.7                5.0                0.3                   0.4
.Non food                     4.3                1.7                1.1                   0.4
Overall                       4.1                4.3                4.1                   4.3
                                                                   Source : National Statistics Institute

For both price systems, the increase in terms of annual sliding in the general index of prices
between 2008 and 2009 was lower than in 2008 for manufactured products (2.5% vs. 4.5%)
and services (2.6% vs. 5.2%), contrary to the increase in foodstuff prices (7.2% vs. 3.1%).



                                               109
At the end of December 2009, prices for unregulated goods had contributed more than 80%
(3.5 percentage points) to annual price sliding, compared to about 66% (2.7 points) in
December 2008.

C. GENERAL EQUALISATION FUND
In 2009, outlays by the general equalisation fund posted a drop of 23.7%, to some 800 MTD
(the equivalent of 1.4% of nominal GDP) vs. 1,048 MTD (1.9%) in 2008. This drop was made
possible by falling world prices for the main imported food and agricultural products, cereals
in particular. Moreover, considerable improvement in cereal production for the 2008-2009
agricultural season helped reduce the volume of imports required to meet local market
demand.
Reforms introduced to improve distribution circuits for cereals/cereal-based products and
vegetable oil and to better target beneficiaries of equalisation contributed to rationalising
consumption and keeping costs down.
The structure of outlays by the general equalisation fund remains dominated by subsidies for
cereals and cereal-based products, representing a share of some 86% of total followed by
subsidies for vegetable oil, with a share of 13.6%. The rest of equalisation outlays (down
from 4.6 MTD in 2008 to 4.3 MTD in 2009) went to school paper, for which prices were up by
5% in 2009. It should be kept in mind that milk was taken off the list of products eligible for
equalisation in January 2008, although its price remains regulated so as to maintain
equilibrium in the dairy sector.
Financing of the general equalisation fund continued to be provided entirely by subsidies
from the State budget.
TRENDS IN GENERAL EQUALISATION FUND OUTLAYS                                                              In MTD)
            Description                2005            2006            2007            2008            2009
    Cereals and by-products            170.9           239.5           474.2            873.01         687.0
    Vegetable oils                      57.8            69.0           111.5            167.5          108.6
    Milk                                 6.7             7.3             7.3              2.8            0.0
    School paper                         7.7             5.6             5.0              4.6            4.3
            Total                      243.1           321.4           598.0          1,047.9          799.9
                                                                        Source : Ministry of Trade and Handicrafts




1
    Exclusive of 70 MTD allotment from State budget in 2007, that was held in the general Treasury for the Cereals
    Board and used in 2008 to cover the equalisation outlays in November and December.

                                                        110
                             V. EMPLOYMENT AND WAGES
The job market was marked in 2009 by considerable deterioration around the world,
especially in developed countries, where unemployment soared as a result of economic
recession caused by fallout from the world financial crisis. Tunisia, which is fairly open to the
outside world (mainly through trade, tourism and foreign direct investment) also experienced
pressure on jobs, despite implementation of support measures for exporting businesses
facing difficulties and adoption of an economic recovery programme under July 2009
supplementary finance law. This was done to contain the ramifications of the crisis, promote
private investment, and maintain jobs.
In this context, the overriding priority of job promotion in Tunisia’s development strategy
continued to receive close attention from national officials since it is so important to achieving
the goals of economic growth and social balance. Reform of the active employment policy
introduced in 2008, which came into force in March 2009, included grouping of various job
support mechanisms in six programmes that are financially managed by the national job fund
21-21. Such restructuring of employment programmes focused in particular on insertion of
graduates of higher education in professional life (particularly those who have been
unemployed for an extended period), active participation by the regions in drawing up and
carrying out employment strategies and unified financing of these programmes, which will
now be handled by the 21-21 job fund.
Financing of ongoing training has since December 2008 continued to be handled by
specialised services at the Ministry of Vocational Training and Employment, in order to be as
effective as possible. The main new parameters are adoption of an advance mechanism on
levies due by businesses in this area (60%) and another involving drawing rights on
mobilized resources.
Special interest was also given to improving the professional skills sought by businesses in
several branches, by providing additional training to those who have graduated in
specialisations for which jobs are not easily found. Along the same lines, to adapt as much
as possible the educational system and vocational training to the needs of Tunisia’s
economy and the requirements of the job market, there have been greater efforts to develop
high employability specialisations, especially greater capacity at schools of higher education
(particularly engineering schools) and enhanced teaching of foreign languages and computer
studies.
New travelling employment offices were created in 2009 to provide on-the-spot services in
the zones and to all categories of priority job seekers. This is in addition to the remote
interactive services developed by the information system at the national job and independent
work agency ANETI to help record job supply and demand. Along these same lines,
upgrading of employment and independent work offices continued, seeking to pinpoint the
needs of businesses and to better orient job seekers. A call centre dealing with jobs was
established on 31 March 2009.
On another front, employment policy was oriented toward the many opportunities available
on the international market, through establishment of closer relations with recruitment
networks abroad, promotion of mechanisms to explore markets looking for Tunisian

                                               111
manpower and skilled human resources, and activation of the role of the national job watch,
in order to become more open to university-level structures and businesses.
It should be stressed that the 2009-2014 presidential programme’s sixth point (entitled
«the overriding priority of employment») includes some 20 measures and incentives that will
contribute to creating 425,000 new jobs over the 2010-2014 time frame, which would meet
additional job demand and reduce the unemployment rate by the end of this period by
1.5 percentage point. To this end, the strategy focused on recovery and more dynamic
private investment (especially in inland regions), promotion of new professions, greater
employability for job seekers, better ongoing training, and catalyzing of private initiative and
independent work. The part of the Presidential Programme dealing with employment gives
priority to ongoing implementation of the programme to find jobs for graduates of higher
education who have been unemployed for an extended period. This will contribute to meeting
by about 2014 the goal that «no one at the end of his or her studies will remain unemployed
or not be given an internship or additional training for more than two years». Priority is given
to young people from underprivileged families, in line with the goal that «no family remain
devoid of a source of income or without at least one member being employed, by the end of
2014».
A new employment programme has been added to the six programmes that began early
2009. This is the public service programme undertaken with the help of the associative
movement, in line with decree n°2010-87 of 20 January 2010. This national programme,
which involves part time public interest initiatives, mobilises regions and associations. It
seeks to create better prospects for getting graduates of higher education started in
professional life.
As for wages, 2009 was marked by attribution of the second wage increase set in the
framework of the seventh three-year agreement negotiated among the relevant parties,
covering the years 2008 to 2010. At the same time, an increase in the legally-mandated
minimum wage went into effect in August 2009.
A. EMPLOYMENT
Employment policy in 2009 was marked by entry into force of deep-seated reform consisting
in restructuring and reduction of a number of job programmes, seeking to making them
sufficiently effective and to ensure better targeting of beneficiaries. Thus six new
programmes were set up to help integrate job seekers in professional life, especially
graduates of higher education whose numbers have been increasing over the years. These
programmes include:
    x Introductory courses to the professional life SIVP are meant for first-time job
seekers who have held a university-level diploma or equivalent for at least six months. The
contract lasts for one year, renewable in exceptional cases at another participating business.
The State provides a monthly allowance of 150 dinars to the beneficiary, social benefits to
the intern, as well as the cost of additional training of up to 200 hours. The company is
responsible for providing the intern with an additional monthly allowance of at least
150 dinars and to recruit at least 50% of the overall number of interns for a period of three
years. 33,639 interns participated in this programme in 2009.
                                              112
     x The contract of insertion of the graduates is for those who have remained
unemployed for more than three years from the date on which his or her diploma was awarded.
This programme helps a beneficiary acquire profession skills by alternating between a private
business and a public or private training structure, according to the needs of the job for which
the company has hired him or her. The State assumes the cost of training of these interns, up
to a ceiling of 400 hours, a monthly allowance of 150 dinars for the intern, an additional
monthly travel allowance of 50 dinars for those interns who live outside the governorate in
which the business is located, social benefits for the intern throughout the duration of the
internship, a premium of 1,000 dinars paid to the company one year after recruitment, and the
employer’s contribution to the legally-mandated regime of social security for wages paid on
new recruitments, for a period of seven years. The company is responsible for paying an
additional monthly allowance of at least 150 dinars to the intern and to hire him or her at the
end of this internship contract. 2,387 beneficiaries took part in this programme in 2009.
     x The contract of adaptation and professional insertion (meant for job seekers who
do not hold a diploma of higher education) helps them to acquire professional skills in line
with the demands of a job offer by a private company for which no qualified person has been
found on the job market. The State provides a monthly allowance of 80 dinars to the intern
for the duration of the contract, social security benefits for the intern, and the cost of
additional training up to a ceiling of 400 hours. The company is responsible for paying an
additional monthly allowance of at least 50 dinars to the intern and to recruit him or her after
completion of the internship contract. 20,400 interns took advantage of this programme in
2009.
    x The contract of reintegrating working is meant for permanent and non permanent
workers who have lost their jobs, with a view to helping them acquire new skills in line with
the previously identified needs of jobs within a private company. The State provides a
monthly allowance of 200 dinars paid to the intern over the duration of the contract, social
security coverage for the intern, and the cost of additional training up to a ceiling of
200 hours. The company is responsible for paying an additional monthly allowance of at least
50 dinars to the intern and to hire him or her at the end of the internship contract.
223 beneficiaries took part in this programme in 2009.
     x The programme of backing promoters of small businesses provides help in
clarifying the project idea and in drawing up the business plan, in adapting business
management in the technical areas pertinent to the project, and in partially assuming the
counterpart of the services provided by public structures and rendered by small businesses.
The State provides the cost of organising sessions on adaptation (up to a ceiling of
200 hours) as well as the cost of adaptation sessions on management (up to a ceiling of
120 hours) and additional technical adaptation sessions (up to a ceiling of 400 hours).
Technical assistance is also funded (up to a ceiling of 12 expert days.) Beneficiaries of this
programme can be taken on by businesses for practical internships for a maximum duration
of one year, compensated by a monthly allowance of 150 dinars for those who hold a
diploma of higher education and 80 dinars for those with any other level of education or
training. 11,443 beneficiaries took part in this programme in 2009.


                                              113
      x The solidarity employment contract is meant for job seekers, to facilitate their
insertion in professional life by taking specific steps in the framework of regional or local
initiatives to promote employment or in the framework of adapting to changes prevailing on
the job market. The monthly allowance granted by the State is between 150 and 250 dinars
for a maximum duration of three years for those who hold a diploma of higher education and
130 dinars for those with a lower level of instruction. The State also assumes the cost
relating to adaptation of the beneficiaries. 28,000 interns took part in this programme in 2009.
NUMBER OF BENEFICIARIES OF THE DIFFERENT EMPLOYMENT PROGRAMMES IN 2009
                      Description                              Initial forecasts            Actual
- Introductory courses to the professional life SIVP                  36,000                 33,639
- Contract of insertion of the graduates                               2,500                  2,387
- Contract of adaptation and professional insertion                   16,600                 20,361
- Contract of reintegrating working                                      800                    223
- Programme of backing promoters of small businesses                  13,700                 11,443
- Solidarity employment contract                                      37,100                 28,000
- Initiatives and source of income                                    82,500                 83,426
                                          Total                      189,200               179,479
                                         Sources : Ministry of Development and International Cooperation

Aside from the above-mentioned employment programmes, initiatives and source of income
concerned more than 83,000 beneficiaries in 2009, slightly more than initial projections.
2009 was a year of transition with regard to financing of employment programmes, which
continued to be handled jointly by the 21-21 national job fund and the budget of the national
job and independent work agency ANETI, prior to unification of the financing of these
programmes under the 21-21 fund in February 2009. 100 MDT were allotted to the national
job fund for attribution to 130,000 beneficiaries, on top of the 57 MTD financed from the State
budget via ANETI. Some 105 MTD were also made available to employment initiatives from
the budget following State adoption of a 730 MTD economic assistance and recovery plan in
the framework of the supplementary finance law for 2009. This financial effort helped
maintain and support employment but also back the setting up of small scale initiatives and
the creation of sources of income, which play a major role in national development strategy
and promotion of income.
In this context, the Tunisian Solidarity Bank BTS in 2009 approved financing of 11,249 initia-
tives (including those supervised by the national fund to promote handicrafts and small
trades FONAPRA) for an overall amount of 124.3 MTD vs. 11,234 initiatives for an overall
cost of 125.5 MTD in 2008. These initiatives would contribute to creation of 20,813 new jobs
compared to 22,226 a year earlier.
Activity at FONAPRA included approval by the banking system of 4,015 initiatives (compared
to 3,132 a year earlier), an increase of more than 28%. The number of initiatives funded in
this framework (3,218 vs. 2,663 a year earlier) were virtually all handled by the BTS,
involving investment of 60.2 MTD (36.1 MTD in medium term bank loans, 20.2 MTD in
budgetary allotments, and 3.9 MTD in auto financing.
Net jobs created in fishing and non agricultural activities were affected by lower levels of
production, investment, and exports by manufacturing industries, down from 70,300 posts in

                                              114
2008 to about 57,000 in 2009. This drop in new jobs would have been sharper if it had not
been for exceptional incentives provided by the State to support and boost the economy,
especially for exporting businesses hit by the crisis. These measures helped maintain some
82,000 jobs in the industrial sector. Additional job demand went up by 3.7% in 2009 to
85,000, with a rate of coverage by creation of new jobs that dipped from 85.7% to 67.1%.
MAIN INDICATORS OF THE JOB MARKET
                                                                                            Variation in %
                  Description                   2006      2007       2008       2009
                                                                                       2008/2007    2009/2008
    - Working population (in thousands)         3,435     3,522      3,604     3,689       2.3           2.4
    - Additional demand (in thousands)             88        87         82        85      -5.7           3.7
    - Job creation1 (in thousands)               76.4      80.2       70.3      57.0     -12.3         -18.9
    - Rate of coverage of additional             86.8      92.2       85.7      67.1      -6.5         -18.6
      demand (in %)2
    - Global unemployment rate (in %)2/3         12.5      12.4        12.4   13.3        0.0           0.9
      . of which : Higher education graduates    16.9      18.2        20.0   21.9        1.8           1.9
                                                  Source : Ministry of Development and International Cooperation

Consequently, from one year to the next, the unemployment rate3 rose from 12.4% to 13.3%
of the working population aged 15 years old and more. The job market remained tight,
especially for graduates of higher education (whose number has been growing each year),
with an unemployment rate for this category of job seekers estimated at 21.9% in 2009 vs.
20% the year before, despite many incentives and measures made available to them that
seek to facilitate their integration in professional life.

                   JOB CREATION IN FISHING AND NON-AGRICULTURAL ACTIVITIES
                                      (In thousands of jobs)
        85                                                                                               85

        80                                                                                               80

        75                                                                                               75

        70                                                                                               70

        65                                                                                               65

        60                                                                                               60

        55                                                                                               55
          2002         2003         2004        2005          2006           2007       2008        2009



B. WAGES
2009 was marked by attribution of the second portion of the wage increase negotiated in the
framework of the 7th three-year agreement between labour and management for the period
2008 to 2010. Similarly, legally mandated minimum wage in the agricultural and non
agricultural sectors went up at about the same rate as the year before, helping to maintain

1
  Net job creation in fishing and non-agricultural activities.
2
  Variation in percentage points.
3
  The unemployment rate is now calculated in line with International Labour Organisation ILO norms, notably
  those relating to the obligation to make a determined effort to find a job.
                                                        115
purchasing power for low-income wage-earners. The guaranteed minimum interprofessional
wage SMIG was raised on 1 August 2009 by 3.5% for a 48 hour workweek and by 3.3% for a
40 hour workweek, bringing monthly wages to 260.624 and 225.160 dinars respectively,
along with the transport allowance of 5 dinars per month introduced in July 1986.
TRENDS IN MINIMUM LEGAL WAGES                                                   (In dinars unless otherwise indicated)
                                      July         July         July           August          Variation in %
         Description                                                                       July 2008     Aug. 2009
                                      2006         2007         2008            2009
                                                                                           July 2007     July 2008
    Guaranteed minimum
    interprofessional wage
    (SMIG)
     -Hourly SMIG (in millimes)
      . 48-hr week                     1,112         1,153        1,211         1,253          5.0            3.5
      . 40-hr week                     1,158         1,199        1,257         1,299          4.8            3.3
     -Monthly SMIG 1
      . 48-hr week                  231.296        239.824     251.888     260.624             5.0            3.5
      . 40-hr week                  200.721        207.828     217.880     255.160             4.8            3.3
    Guaranteed minimum
    daily agricultural wage
    (SMAG)                             7.129         7.379        7.749       8.019             5.0           3.5
                                                                   Source : Official Journal of the Tunisian Republic

Similarly, the guaranteed minimum daily agricultural wage SMAG went up by 3.5% or
270 millimes per workday to 8.019 dinars. In parallel, the premium for technicity paid in
addition to the SMAG to specialised and skilled agricultural workers was raised to 520 and
980 millimes respectively, bringing respective wages per workday to 8.539 and 8.999 dinars.
Retirement benefits paid to some 500,000 beneficiaries by the national social security
authority CNSS were increased on 1 August 2009, at a rate equivalent to the increase in the
SMIG. A further increase in minimum wages was decided on in the framework of celebration
of Labour Day on 1 May 2010, with a view to providing increases to this category of wage-
earners as was the case for other social-professional categories governed by collective
agreements.




1
    Excluding the monthly TND 5 transport allowance instituted in July 1986.
                                                         116
                                           VI. INVESTMENT
Public officials continued to pay close attention to promotion of investment, a critical element
for carrying out the country’s development strategy, especially with regard to growth and new
jobs. To this end, in addition to timely measures to help businesses hard hit by the drop in
foreign demand, structural measures were adopted in 20091 to stimulate investment and
stand up to the adverse impact of the international financial crisis on the real economy.
To improve the business climate, several modern spaces were developed to provide
premises for businesses, along with the infrastructure and modern technology required by
investors. And to make it easier to set up a business, there are now just five formalities
required (down from 10), quite aside from proliferation of one-stop shops at 11 new locations
in 2009.
A. OVERALL TRENDS IN INVESTMENT
In line with fallout from unfavourable international conditions, especially for exports and foreign
investment flows, investment in Tunisia in 2009 grew somewhat more slowly. Gross fixed
capital formation (GFCF) went up by 8.1% (vs. 13.1% a year earlier) to 14,052 MTD. Thus the
investment rate went up by 0.4 percentage point to 23.9% of GDP.
TRENDS IN MAIN INVESTMENT INDICATORS
                       Description                                 2006       2007        2008       2009
 Global GFCF (in MTD)                                             10,333     11,490      13,001     14,052
 Variation (in %)                                                   15.1       11.2        13.1         8.1
 Investment rate (in % of GDP)                                      22.6       23.0        23.5       23.9
 Structure of GFCF by economic agent (in %)
 Public sector                                                        38.0     37.6        38.5        42.6
 Private sector                                                       62.0     62.4        61.5        57.4
                                                Source : Ministry of Development and International Cooperation

Analysis of investment by economic agent shows investment by the public sector growing at
a faster pace than the year before (19.4% vs. 15.9%), with share increasing from 38.5% in
2008 to 42.6% in 2009. Inversely, investment by the private sector grew at a much slower
rate of 1% in 2009 vs. 11.5% a year earlier, with share in overall investment coming to 57.4%
vs. 61.5% the year before. 11 regional conferences on partnership and renewed private
investment were held with the active participation of banks, with the latter agreeing to finance
556 initiatives for a total investment amount of 712.5 MTD, likely to create more than
10,000 jobs.
Foreign direct investment (FDI) flows dropped by 33% in 2009 (compared to a considerable
increase of some 64% a year earlier) to 2,279 MTD. This drop involved in particular
investment by the energy sector, which absorbed more than half of FDI, a decrease of
36.2%, attributable to falling prices for hydrocarbons on the world market.




1
 See details about these measures in the chapter entitled «Main economic, monetary and financial regulatory
measures».
                                                     117
                                     GDP AND GFCF
                               IN CURRENT PRICES (In MTD)


  60,000

  50,000

  40,000

  30,000

  20,000

  10,000

       0
                 2006                2007                    2008                    2009

                                       GDP         GFCF

B. GROSS FIXED CAPITAL FORMATION BY BRANCH OF ACTIVITY
Slower growth in GFCF in 2009 was the result of lower investment in manufacturing
industries (-4.5% vs. +19.1% a year earlier) and by slower growth in investment in non
manufacturing industries (+3.4% vs. +28.5%) and in community facilities (+11% vs. +28%).
GROSS FIXED CAPITAL FORMATION BY BRANCH OF ACTIVITY
                                                        Variation
                                    Value in MTD                              Structure in %
         Description                                      in %
                              2007      2008     2009   2009/2008         2007      2008      2009
Agriculture & fishing           921       923       977     5.9             8.0         7.1     7.0
Non manufacturing industries  2,559     3,288     3,400     3.4            22.3        25.3    24.2
Manufacturing industries      1,249     1,487     1,420    -4.5            10.9        11.4    10.1
Market services               5,811     6,087     6,905    13.4            50.6        46.8    49.1
community facilities            950     1,216     1,350    11.0             8.2         9.4     9.6
          Total              11,490    13,001   14,052      8.1           100.0      100.0    100.0
                                        Source : Ministry of Development and International Cooperation

On the other hand, GFCF in market services posted considerable growth (13.4% vs. 4.7% in
2008), notably transport (13.9% vs. 12.9%), housing (13% vs. 3.3%) and communications
(8.1% vs. 5.7%), as well as agriculture and fishing (5.9% vs. 0.2%).
As in the past, breakdown of investment by sector shows that market services dominated,
with a share in overall GFCF that rose from 46.8% in 2008 to 49.1% in 2009, with better
basic infrastructure for the various means of transport and for the communications sector as
well as steady growth in housing construction. Inversely, the share of non manufacturing
industries in overall GFCF came to 24.2% vs. 25.3% in 2008, mainly because of lower
investment in the hydrocarbons sector (-9.9% vs. +37% a year earlier). Relative shares for
agriculture/fishing and manufacturing industries went down to 7% and 10.1% respectively vs.
7.1% and 11.4% a year earlier, while the share of collective equipment in overall investment
continued to go up, from 9.4% in 2008 to 9.6% in 2009.



                                             118
                                   BREAKDOWN OF GFCF BY SECTOR
                         2006                                                     2009
   Community                    Agric. &                         Community                Agric. &
    facilities                  fishing                           facilities              fishing
      8.3%                       8.9%                               9.6%                   7.0%
                                                                                                         Manuf.
                                                Manuf.
                                                                                                       industries
                                              industries
                                                                                                         10.1%
                                                11.0%




                                                 Non-                                                     Non-
   Market                                       manuf.            Market                                 manuf.
  services                                    industries         services                              industries
   53.9%                                        17.9%             49.1%                                  24.2%


1. AGRICULTURE AND FISHING
After a year of virtual stagnation, investment in this sector rose by 5.9% in 2009 to 977 MTD. This
trend was due to an 8.8% increase in public investment and 3.8% in private investment. Some
88% of public investment (which accounted for 42.7% of total vs. 41.5% a year earlier) was
made by the Administration, notably in agricultural hydraulics and integrated agricultural projects.
Investment by the private sector (with a share amounting to 57.3% of total vs. 58.5% a year
earlier) went mainly to the branches of agricultural hydraulics, acquisition of material, livestock
farming, and tree crops.
The breakdown of investment by branch of activity continued to be dominated by agricultural
hydraulics, in line with ongoing implementation of the plan to mobilise hydraulic resources
and generalisation of the programme to conserve water in irrigated agricultural zones. The
amount invested in this field went up by 16.2% to 352 MTD, representing thus 36% of overall
GFCF in the sector, compared to 303 MTD and 32.8% in 2008. This development was
mainly the result of investment in the public sector, which went up by about 22%.
GROSS FIXED CAPITAL FORMATION IN AGRICULTURE AND FISHING
                                                      Variation in
                                     Value in MTD                       Structure in %
         Description                                       %
                                2007    2008     2009  2009/2008   2007     2008      2009
Agricultural hydraulics         321      303      352       16.2    34.8     32.8      36.0
Agricultural material           113      127      138        8.7    12.3     13.8      14.1
Livestock farming               114      106      119       12.3    12.4     11.5      12.2
Tree crops                      100      104       95       -8.7    10.8     11.3       9.7
Fishing                          44       47       46       -2.1     4.8      5.1       4.7
Forestry                         79       84       64      -23.8     8.6      9.1       6.6
Water & soil conservation (CES)  44       48       48        0.0     4.8      5.2       4.9
Integrated agricultural deve-
lopment projects                 45       39       46       17.9     4.9      4.2       4.7
Studies, research & extension
works                            14       16       18       12.5     1.5      1.7       1.9
Miscellaneous                    47       49       51        4.1     5.1      5.3       5.2
              Total             921      923      977        5.9   100.0    100.0    100.0
Sources : Ministry of Development and International Cooperation and Ministry of Agriculture, Hydraulic Resources
& Fishing



                                                           119
Investment for acquisition of agricultural material, almost exclusively by private operators
(98.2%), grew but at a slower pace, down from 12.4% in 2008 to 8.7%, posting 138 MTD. In
this regard, there was a higher level of targeted investment premiums disbursed to
agricultural service companies to buy tractors as well as harvesters and their accessories.
After a year of decline, GFCF in livestock farming went up by 12.3% in 2009 to 119 MTD, of
which more than 84% came from the private sector to boost breeding stock.
Investment in tree crops fell by 8.7% to 95 MTD because of a 10% drop in funds invested by
private operators.
GFCF in fishing went down just slightly (by 2.1%) to 46 MTD. An amount of 40 MTD of this
total was private investment, which remained at the same level for the third straight year.
Investment in forestry was down by 23.8% (after increasing by 6.3% in 2008) to 64 MTD.
This drop was due to a 26% decrease in funds invested in this field by the public sector.
A new category of license was introduced in 2009 for private operators to carry out
reforestation activities on public land.
GFCF in water and soil conservation remained at the same 48 MTD level as the year before.
After going down in 2008 by some 13%, investment in integrated agricultural development
enjoyed recovery to the tune of 17.9% in 2009 to reach 46 MTD, while investment in studies,
research and extension work continued to grow at a fairly brisk pace of 12.5% (down from
14.3% in 2008) to 18 MTD.
34% of investment in agriculture and fishing was financed from State budget resources in
2009, 18% from bank loans, 15% from external resources, and the rest (33%) from auto
financing in the sector.
2. NON MANUFACTURING INDUSTRIES
After having posted high growth of 28.5% in 2008, investment in non manufacturing
industries went up at a moderate rate of 3.4% in 2009 to 3,400 MTD. Slower growth was the
result of a drop in funds invested in the hydrocarbons branch (crude oil and natural gas),
which absorbed almost 75% of GFCF in the energy sector, compared to 84.6% a year
earlier. In effect, following lower GFCF allotted for research and oil exploration and
development of existing fields, investment in this branch declined by 9.9% (vs. an increase of
37% in 2008) to 2,260 MTD.
GROSS FIXED CAPITAL FORMATION IN NON MANUFACTURING INDUSTRIES
                                                  Variation
                              Value in MTD                       Structure in %
      Description                                   in %
                        2007      2008     2009  2009/2008  2007      2008     2009
 Energy                 2,250     2,964    3,021      1.9    87.9      90.2     88.9
  - Water                  77        94      111    18.1      3.0       2.9      3.3
  - Electricity           342       361      650    80.1     13.4      11.0     19.1
  - Hydrocarbons1       1,831     2,509    2,260     -9.9    71.5      76.3     66.5
 Mining                    99        99      139    40.4      3.9       3.0      4.1
 Construction and civil
 engineering              210       225      240      6.7     8.2       6.8      7.0
                Total   2,559     3,288    3,400      3.4   100.0     100.0    100.0
                                                  Source : Ministry of Development and International Cooperation

1
 This includes crude oil and natural gas ; oil refining being listed under manufacturing industries as per the new
system of national accounts.
                                                      120
On the other hand, GFCF in electricity posted high growth of 80.1% in 2009 (vs. 5.6% the
year before) to 650 MTD or 21.5% of GFCF in the energy sector. This investment served in
particular to develop production activity and to increase subscriber hook-ups by the Tunisian
electricity and gas company STEG to the natural gas network.
Investment in water went up by a sizeable 18.1% (vs. 22.1% in 2008) to 111 MTD. This went
for the most part to extension of the drinking water distribution network, especially in rural
zones where the rate of service rose from 93.5% in 2008 to 95%. And the national water
supply and distribution company SONEDE continued to implement water conservation and
improvement of drinking water quality initiatives, particularly in southern Tunisia.
In the mining sector, GFCF went up by 40.4% in 2009 to 139 MTD, after having stagnated
the year before at 99 MTD. The majority of this investment continued to go to phosphates.
Investment in construction and civil engineering went up at a rate very near the 2008 figure
(6.7% vs. 7.1%), posting 240 MTD.
3. MANUFACTURING INDUSTRIES
At 1,420 MTD or 10.1% of overall GFCF, investment in manufacturing industries dropped by
4.5% in 2009, after strong growth the past few years. This drop involved in particular building
materials/ceramics/glass and textiles/clothing-leather/footwear. Manufacturing industries
absorbed 772 MTD in FDI flows, an increase of 20.2% over the 2008 figure.
GROSS FIXED CAPITAL FORMATION IN MANUFACTURING INDUSTRIES
                                                        Variation
                                    Value in MTD                      Structure in %
          Description                                     in %
                              2007      2008     2009  2009/2008  2007     2008     2009
Agrofood industries             261       270      288       6.7   20.9     18.1     20.3
Building materials, ceramics
and glass                       154       299      250     -16.4   12.3     20.1     17.6
Mechanical & electrical
industries                      285       318      310      -2.5   22.8     21.4     21.8
Textiles, clothing, leather &
footwear                        276       275      225     -18.2   22.1     18.5     15.9
Chemical industries              92       135      150      11.1    7.4      9.1     10.6
Oil refining                     33        40       40       0.0    2.7      2.7      2.8
Tobacco industry                  9        10       12      20.0    0.7      0.7      0.8
Miscellaneous industries        139       140      145       3.6   11.1      9.4     10.2
               Total          1,249     1,487    1,420      -4.5  100.0    100.0    100.0
                                         Source : Ministry of Development and International Cooperation

Investment in agrofood industries increased by 6.7% to 288 MTD or 20.3% of overall GFCF
in manufacturing industries and went in particular to animal slaughter, oil production, and
canned food.
GFCF in building materials/ceramics/glass, on the other hand, dropped by 16.4% to
250 MTD, with a share in overall manufacturing investment that fell from 20.1% to 17.6%.
Posting 310 MTD or 21.8% of overall GFCF in manufacturing industries, investment in
mechanical/electrical industries went down by a 2.5% in 2009, after increasing by 11.6% a
year earlier. This drop involved, notably, steelworks and cast iron works, metal working and
automotive industries.

                                             121
Similarly, investment in textiles/clothing-leather/footwear went down by 18.2% in 2009 to
225 MTD (15.9% of GFCF in manufacturing industries), despite an increase of more than
14% in funds invested in leather/footwear industries. As in the past, investment went to the
spinning/weaving/finishing branch (60 MTD) and hosiery/apparel industries (120 MTD).
On the other hand, GFCF in chemical industries continued to grow, although at a slower
pace than in 2008 (11.1% vs. 46.7%), posting 150 MTD or 10.6% of GFCF in manufacturing
industries, compared to 135 MTD and 9.1% a year earlier.
Investment in the tobacco industry and miscellaneous industries went up in 2009 by 20% and
3.6% respectively to 12 MTD and 145 MTD, reflecting an increasing share for miscellaneous
manufacturing activity in the country’s economic fabric.
GFCF in oil refining industries, which are now classified under manufacturing industries after
having previously been listed in the energy sector, posted stagnation in 2009 at 40 MTD.
4. MARKET SERVICES
Investment in market services went up by 13.4% in 2009 (vs. 4.7% a year earlier) to
6,905 MTD, with share in overall GFCF up from 46.8% in 2008 to 49.1%. Growth was
notably evident in transport, communications and housing.
GROSS FIXED CAPITAL FORMATION IN MARKET SERVICES
                                                  Variation
                               Value in MTD                                      Structure in %
       Description                                  in %
                         2007      2008     2009  2009/2008                 2007       2008     2009
Transport                1,595     1,800    2,050    13.9                    27.5        29.6    29.7
Communications             700       740      800      8.1                   12.0        12.1    11.6
Tourism                    351       353      380      7.6                    6.0         5.8     5.5
Maintenance and repair      29        31       33      6.5                    0.5         0.5     0.5
Trade and other services 3,136     3,163    3,642    15.1                    54.0        52.0    52.7
- Financial institutions   169       171      179      4.7                    2.9         2.8     2.6
- Trade                    212       240      250      4.2                    3.7         4.0     3.6
- Other services         2,755     2,752    3,213    16.8                    47.4        45.2    46.5
  of which : Housing     1,686     1,742    1,968    13.0                    29.0        28.6    28.5
               Total     5,811     6,087    6,905    13.4                   100.0       100.0   100.0
                                          Source : Ministry of Development and International Cooperation

GFCF in the transport sector continued to grow at a sustained rate of 13.9% (vs. 12.9% in
2008) to 2,050 MTD, in line with ongoing promotion of mass transit, better basic
infrastructure, and development of multimodal transport and logistic services, meant to boost
economic competitiveness. The sector’s share of investment in market services was slightly
higher than the previous year’s figure, at 29.7% vs. 27.5% two years earlier.
The communications sector absorbed 800 MTD (11.6% of GFCF in market services), an
increase of 8.1% compared to the 2008 figure vs. 5.7% a year earlier. In particular, a third
telecommunication license to provide second and third generation landline and mobile phone
services as well as internet services was awarded to the Divona Orange-France Telecom
consortium, for foreign direct investment of 92 MTD. Furthermore, in the framework of
investment promotion in the field of information and communication technologies (ICT), the
network of remote work regional centres (cyberparcs) was further strengthened in 2009 by
start up of an eighth centre in Tozeur, in addition to completion of construction at two centres

                                              122
(Kebili and Tataouine) and ongoing construction at five other inland centres (Medenine,
Zaghouan, Beja, Jendouba and Sidi Bouzid).
Investment in tourism rose by 7.6% in 2009 (vs. 0.6% a year earlier) to 380 MTD or 5.5% of
GFCF in market services (2.7% of overall investment). This envelope served in particular to
increase hotel lodging capacity, both in new and traditional locations, while also pursuing
implementation of the sector’s upgrading programme.
Similarly, investment in maintenance and repair activities (with a very low 0.5% share of
GFCF in market services) increased by 6.5% in 2009 to 33 MTD.
Investment in the financial sector came in at 4.7% over the 2008 figure to 179 MTD or 2.6%
of GFCF in market services. In this regard, it should be noted that the setting up of 74 new
agencies brought the total to 1,209 bank branches at the end of 2009. This development
helped boost the rate of bank service density to one branch per 8,600 inhabitants, compared
to one branch per 9,100 inhabitants in 2008.
Investment in the trade sector in 2009 grew but at a slower rate of 4.2% (vs. 13.2% a year
earlier) to post 250 MTD or 3.6% of GFCF in market services.
Investment in housing went up by 13% in 2009 (vs. 3.3% the year before) to 1,968 MTD or
28.5% of GFCF in market services (14% of overall investment in the country). These funds
served to build some 51,000 homes, 48,600 by private promoters. It should be noted that
79.2% of families owned a home in 2009 and that the rate of substandard housing went
down to 0.3% of total.
5. COMMUNITY FACILITIES
Provided almost entirely by the Administration, investment in community facilities increased
by 11% in 2009 (vs. 28% a year earlier) to 1,350 MTD or 9.6% of overall GFCF. These funds
were devoted for the most part to implementation of various initiatives in a number of fields
such as education, higher education, scientific research, health, culture, sports and youth.
C. INVESTMENT FINANCING
As in the past, investment in 2009 for the most part was financed by domestic resources
generated by national savings. In effect, the domestic financing rate came to 90.7% of overall
GFCF, down from 94.1% in 2008. With stock variation down significantly, 89.6% of
investment’s total financing needs was covered by national savings, up from 85.3% a year
earlier. Remaining needs were covered by external resources, mainly medium and long term
loans and FDI flows.
1. NATIONAL SAVINGS
Influenced by slower economic growth, national savings went up in 2009 by just 5.8% (well
below the previous year’s figure of 14.2%) to 12,941 MTD and this despite lower growth in
household consumption. Thus the savings rate came to 22% of gross national disposable
income (GNDI) vs. 22.3% in 2008.
The banking sector and the capital market have played an essential role in mobilisation of
savings resources and their assignment to financing of initiatives. On the stock market, the

                                             123
primary market posted a net consolidation of 976 MTD or 12.1% (vs. 644 MTD or 8.1% in
2008) in financing for private investment. As for bank financing, the amount of medium and
long term loans approved in 2009 came to 4,340 MTD vs. 3,011 MTD a year earlier,
increasing by some 44%.
INVESTMENT AND ITS DOMESTIC FINANCING                               (In MTD unless otherwise indicated)
                                                                                 Variation in %
           Description                2006     2007       2008      2009
                                                                             2008/2007 2009/2008
Global GFCF                           10,333   11,490    13,001     14,052        13.1              8.1
Stock variation                          396      394     1,337        503       239.3            -62.4
Total financing needs =
GFCF + stock variation                10,729   11,884    14,338     14,555          20.6           1.5
National savings                       9,865   10,709    12,228     12,941          14.2           5.8
 - In % of GNDI                         21.6     21.6      22.3       22.0
 - In % of GDP                          21.6     21.5      22.1       22.0
Rate of domestic financing
 - National Savings/GFCF (in %)         95.5     93.2       94.1      92.1
 - National Savings/Total financing
   needs (in %)                         91.9      90.1       85.3     88.9
                                         Source : Ministry of Development and International Cooperation

2. EXTERNAL RESOURCES
Coming to 5,083 MTD, gross inflows of external capital went down by 4.8% in 2009 after
increasing by 23.8% the previous year. This decrease was the result of a sharp drop in
foreign holdings, especially FDI (-33%), partially offsetting recovery in medium and long term
borrowings (+56.2% vs. -19.1% in 2008), which accounted for 2,726 MTD or 53.6% of overall
gross external capital inputs.
Capital outflows, made up essentially of repayment of principal on external loans, posted an
increase of 20.8% (after a 17.7% drop a year earlier) to 2,590 MTD.
MEDIUM AND LONG TERM FINANCIAL RESOURCES FROM ABROAD
                                                Variation
                            Value in MTD                                         Structure in %
      Description                                 in %
                      2007      2008     2009  2009/2008                     2007          2008     2009
 Borrowings           2,157     1,745    2,726      56.2                      50.0      32.7      53.6
 Foreign holdings     2,158     3,597    2,357     -34.5                      50.0      67.3      46.4
 of which : FDI       2,071     3,399    2,279     -33.0                      48.0      63.6      44.8
Gross external inputs 4,315     5,342    5,083      -4.8                    100.0      100.0     100.0
 Capital outflows     2,604     2,144    2,590      20.8                      60.3      40.1      51.0
Net external inputs   1,711     3,198    2,493     -22.0                      39.7      59.9      49.0
                                                                         Source : Central Bank of Tunisia

Overall, net external capital inputs regressed by 22%, down from 3,198 MTD in 2008 to
2,493 MTD. These resources helped round out the investment financing plan and also
increase the level of net assets in foreign currency. At the end of 2009 the latter came to
13,353 MTD (the equivalent of 186 days of imports) vs. 11,656 MTD (139 days) at the end
of 2008.




                                               124
                                  VII. FOREIGN TRADE
A. GLOBAL TRENDS
2009 was marked by falling demand from Tunisia’s main partners abroad on the one hand
and by a drop in commodity prices on the world market on the other. Thus Tunisia’s foreign
trade decreased by 17.6% for exports and by 14.4% for imports, compared to respective
increases of 21.8% and 23.7% the year before. This resulted in a 3% narrowing of the trade
deficit to 6,409 MTD and a 3 percentage point decrease in the rate of coverage to 75.2%.
TRENDS IN TUNISIA’S FOREIGN TRADE                               (In MTD unless otherwise indicated)
                                                               Rate of coverage of imports by
   Year        Exports FOB        Imports CIF       Deficit
                                                                       exports (in %)
   1998            6,518              9,490         2,972                      68.7
   1999            6,967             10,071         3,104                      69.2
   2000            8,005             11,738         3,733                      68.2
   2001            9,536             13,697         4,161                      69.6
   2002            9,749             13,511         3,762                      72.2
   2003           10,343             14,039         3,696                      73.7
   2004           12,404             16,185         3,781                      76.6
   2005           13,794             17,292         3,498                      79.8
   2006           15,558             20,003         4,445                      77.8
   2007           19,410             24,437         5,027                      79.4
   2008           23,637             30,241         6,604                      78.2
   2009           19,469             25,878         6,409                      75.2
                                                                 Source : National Statistics Institute

The drop in imports is closely tied to the drop in prices for the main raw materials and semi-
finished products that Tunisia acquires abroad, as illustrated in lower average purchase
prices expressed in US dollars for sulphur (-90%) and ammoniac (-53%), as well as for non
ferrous metals such as copper and aluminium. Thus the value of imported raw materials and
semi finished products as a whole decreased by 21% or 2,152.7 MTD, accounting for 49.3%
of the overall drop in imports.
Energy products, affected by slowing demand, saw prices go down sharply for gas and crude
oil. Indeed, oil prices fell from 147 dollars a barrel in the summer of 2008 to some 70 dollars
a barrel. This corresponded to energy costs that were 43.2% (2,124.1 MTD) lower, corres-
pondding to 48.7% of the overall drop in imports.
TUNISIA’S BALANCE OF TRADE (ENERGY EXCLUDED)                    (In MTD unless otherwise indicated)
                                  Value in MTD                          Variation in %
        Description
                          2007         2008     2009               2008/2007      2009/2008
 Exports FOB             16,271.8    19,557.1  16,831.5               20.2               -13.9
 Imports CIF             21,435.7    25,327.4  23,087.9               18.2                 -8.8
 Balance                 -5,163.9    - 5,770.3 -6,256.4            -606.4 MTD         -486.1 MTD
 Rate of coverage (in %)     75.9         77.2     72.9            +1.3 point          -4.3 points
                                                                 Source : National Statistics Institute

If energy is excluded, trade posted drops of 13.9% for exports and 8.8% for imports,
yielding a 8.4% widening of the trade deficit and a 4.3 percentage point drop in the rate of
coverage.


                                              125
                        TRENDS IN FOREIGN TRADE IN TUNISIA (In MTD)

   35,000
   30,000
   25,000
   20,000
   15,000
   10,000
    5,000
       0
   -5,000
  -10,000
                 2005                2006                 2007              2008               2009

                          Exports FOB              Imports CIF             Deficit


The drop in exports, as in imports, was due mainly to lower prices. The decline in average selling
prices expressed in US dollars for the main phosphate products contributed greatly to falling
sales in the sector (-49.6% or -1,547.8 MTD), about 37% of the reduction in overall exports.
The 35.3% decrease in sales by the energy sector, which involved mainly crude oil in the wake of
lower prices, accounted for some 35% of the drop in exports.
Exports by the textiles/clothing-leather/footwear sector, which had posted virtual stagnation
(+0.4%) in 2008, dropped by 8.9% in 2009, influenced in particular by lower quantities
despite higher prices for the sector’s main products.
As for mechanical and electrical industries, sales abroad went down over the first half of
2009, then once again took off on an upward trend starting in July, but this was not enough
to offset the drop in prices over the first half of the year.
At the level of foreign trade regimes, trends were marked by lower exports under the general
regime (-31.5%) and a lesser drop in imports (-16.4%). This compares to respective increases
of 43.8% and 32.8% in 2008. Thus the trade deficit relative to this regime went down slightly by
55 MTD or 0.5%, compared to an increase of 1,974.8 MTD or 22.9% a year earlier.
For trade under the offshore regime, exports went down by 5.4% and imports by 9.5%,
compared to respective increases of 7.3% and 5.6% in 2008, leading to an increase of
140.8 MTD or 3.5% in the trade surplus.
TRENDS IN MAIN FOREIGN TRADE RATIOS                                                                   (In %)
                Export          Rate of                              Rate of                  Rate of
   Year
              effort rate     dependence                            openness                penetration
   2006          34.0            43.7                                     77.7                    42.9
   2007          38.9            49.0                                     87.9                    48.1
   2008          42.7            54.7                                     97.4                    53.1
   2009          33.1            44.0                                     77.1                    42.8
              Sources : National Statistics Institute, and Ministry of Development and International Cooperation

The main ratios of foreign trade fell in 2009, especially the rate of openness, down by
20.3 percentage points to 77.1%.
                                                    126
B. TRENDS IN TRADE BY SECTOR OF ACTIVITY
Analysis of trade by sector shows that figures were down for all sectors except other
manufactured industries, for which imports grew at a faster pace than exports, boosting its
sectoral ranking in imports.
As for exports, the drop involved mainly the sectors of mining products and phosphate
based-products, after a year of exceptional progress in line with a sharp increase in prices.
Sales in the energy sector also fell for the same reason.
TRENDS IN FOREIGN TRADE BY SECTOR OF ACTIVITY
                                                   2008                                2009
          Description                                          Share                                Share of
                                       Value in    Variation              Value in     Variation
                                                               of total                               total
                                        MTD         (in %)                 MTD          (in %)
                                                               (in %)                                (in %)
Exports                                 23,637.0      21.8     100.0      19,469.2       -17.6       100.0
 -Agriculture/fishing & agrofood
   industries                            2,155.6      14.2       9.1       1,849.5       -14.2          9.5
  .Agriculture and fishing                 617.5      13.7       2.6         580.7        -6.0          3.0
  .Agrofood industries                   1,538.1      14.4       6.5       1,268.8       -17.5          6.5
 -Energy                                 4,079.9      30.0      17.3       2,637.7       -35.3         13.5
 -Mining products                          205.0     126.8       0.9          90.2       -56.0          0.5
 -Non-food manuf. industries            17,196.5      20.3      72.7      14,891.8       -13.4         76.5
  .Textiles, clothing, leather &
 footwear                                6,098.3       0.4      25.8       5,558.1        -8.9         28.5
  .Mechanical & electrical indust.       6,232.8      18.3      26.3       6,001.0        -3.7         30.8
  .Phosphate & phos. based-products      3,117.8     129.7      13.2       1,570.0       -49.6          8.1
  .Other manufactured products           1,747.6       9.7       7.4       1,762.7         0.9          9.1
    of which : * Building materials,
                  ceramics and glass       396.7      20.0       1.7         369.1        -7.0         1.9
               * Chemical products         490.1       2.8       2.1         494.3         0.9         2.5
Imports                                 30,241.2      23.8     100.0      25,877.6       -14.4       100.0
 -Agriculture/fishing and agrofood
   industries                            3,318.6      26.8      11.0       2,442.3       -26.4          9.4
  .Agriculture and fishing               1,921.4      18.0       6.4       1,304.5       -32.1          5.0
  .Agrofood industries                   1,397.2      41.2       4.6       1,137.8       -18.6          4.4
 -Energy                                 4,913.8      63.7      16.2       2,789.7       -43.2         10.8
 -Mining products                           54.9      26.8       0.2          33.8       -38.4          0.1
 -Non-food manuf. industries            21,953.9      16.9      72.6      20,611.8        -6.1         79.7
  .Textiles, clothing, leather &
 footwear                                4,076.3       0.2      13.5       3,774.7        -7.4         14.6
  .Mechanical & electrical indust.      11,920.3      14.3      39.4      11,929.6         0.1         46.1
  .Phosphate & phos. based-products      1,679.6     275.6       5.6         493.4       -70.6          1.9
  .Other manufactured products           4,277.7      11.8      14.1       4,414.1         3.2         17.1
    of which : * Building materials,
                 ceramics & glass          279.6      27.9        0.9         313.6      12.2           1.2
               * Chemical products       2,519.8      10.6        8.3       2,595.6       3.0         10.0
                                                                           Source : National Statistics Institute

Sales by the mechanical/electrical and textiles/clothing-leather/footwear sectors, the main
export sectors, were down at moderate rates, following falling foreign demand.
As for imports, drops were in particular recorded in phosphate based-products, energy,
mining products, and agriculture/fishing/agrofood industries. Imports by the textiles/clothing-
leather/footwear and mechanical/electrical industries sectors went down at a slower pace.



                                                      127
                 STRUCTURE OF FOREIGN TRADE BY SECTOR OF ACTIVITY

                EXPORTS FOB                                                  IMPORTATIONS CIF
                     Other      Mining                                            Other
    Agric.&          manuf.    phosph.&                                           manuf.
                                                                 Agric.&                           Energy
   fishing &         9.1%       prod's                                            17.1%
                                                                fishing &                          10.8%
   agro-food                     8.5%                           agro-food
       ind.                                      Energy             ind.                              Mine,
      9.5%                                       13.5%             9.4%                             phosph.&
                                                                                                     prod's
                                                                                                      2.0%

                                             Clothing &
                                            accessories
                                               15.5%

                                                                  Elect.
                                                                Industries                           Textile,
  Mechan. &                               Other textile
                                                                  14.4%                             leather &
    elect.         Leather &                 prod's                                    Mechan.      footwear
  Industries       footwear                  8.8%                                     Industries      14.6%
    30.8%            4.3%                                                               31.7%




1. AGRICULTURE, FISHING AND AGROFOOD INDUSTRIES
Trade in this sector in 2009 was marked by imports that decreased at a faster pace than
exports (26.4% vs. 14.2% respectively), leading to a 570.2 MTD (49%) lowering of the trade
deficit and an 10.7 percentage point increase in the rate of coverage (75.7% vs. 65%). The
balance of food for human consumption posted a 38 MTD surplus, compared to a deficit of
751 MTD a year earlier.
Despite the drop in exports by the sector, their share in overall exports went up slightly to
9.5%. Lower sales were due in particular to the drop in exports of olive oil, both in terms of
value (29.7% or 225.7 MTD) and volume (16.2% or 27,400 tonnes). Italy remained the main
destination for Tunisian olive oil with a 46.3% share, followed by the United States (whose
share increased from 14.1% to 21.7%), Spain (6.5%) and Morocco (6.1%). The share of exports
of olive oil by private operators in overall exports went up by one percentage point to 96%.
Exports of seafood, mostly to Italy (44.3%) and Japan (26%), went down by 23.4%
(55.7 MTD). Tonnage declined by 18.5% or 3,700 tonnes.
Sales of concentrated tomato paste, which almost doubled in 2008, fell by 48.9% or 19.4 MTD,
following a 54.4% drop in quantity. As usual, Libya remained the primary destination with a
share of some 75%.
The drop in exports of cereal flours at a faster pace, both in terms of value (-74.1% or
-4.3 MTD) and quantity (-77.3% or -9,900 tonnes), also contributed to lower sales for the
sector. The main markets were Libya (53.3%) and other African countries such as Chad
(26.7%) and Niger (10.6%).
The lower quantities exported also resulted in lower export receipts for other products, mainly
vegetable and fruit-based prepared foods (-34.5% or -16.6 MTD), tobacco (-10.6% or -6.1 MTD)
and citrus fruit (-13.7% or -3.4 MTD), most of which (81.4%) was shipped to France.
On the other hand, on the basis of higher tonnage, exports of other products increased at
fairly high rates, such as dates (+13.6% or +28.5 MTD) exported mainly to Morocco (26.8%),
France (17%) and Germany (9.9%) and cereal-based food items (+19.1% or 21.6 MTD),
which went mainly to Libya (40.8%) and Algeria (15%).
                                                          128
Imports by the agriculture/fishing/agrofood sector saw their share in overall imports fall from
11% in 2008 to 9.4% in 2009. This decrease was due to decline in purchases of food
products for human consumption (-38.7%), of which almost 85% was attributable to a drop in
imported cereals (-57.5% or -851.6 MTD), influenced by the combined effect of lower
quantities and lower prices.
BALANCE OF TRADE IN AGRICULTURE/FISHING AND AGRO FOOD INDUSTRIES
                                                                                             Variation
                            Quantity in 1,000 tonnes             Value in MTD
     Description                                                                           2009/2008 in %
                             2007     2008      2009      2007       2008        2009      Quant. Value
Exports                                                   1,888.0   2,155.6    1,849.5                  -14.2
Human food                   615.7     677.7     648.8    1,615.5   1,849.9    1,631.2        -4.3      -11.8
of which : .Olive oil        172.6     169.1     141.7      696.0     759.1      533.4       -16.2      -29.7
 .Seafood                     21.4      20.0      16.3      232.8     237.6      181.9       -18.5      -23.4
 .Dates                       68.9      69.5      77.3      211.0     209.2      237.7        11.2       13.6
 .Citrus fruits               16.3      28.4      24.3       13.6      24.9       21.5       -14.4      -13.7
 .Cereal-based food items     63.5      74.3     102.1       77.5     112.9      134.5        37.4       19.1
 .Concentrated tomato
   paste                      18.7      23.7      10.8       21.0      39.7       20.3       -54.4      -48.9
 .Harissa                      8.4      11.3      12.0       20.4      22.9       29.2         6.2       27.5
 .Cereal flours               43.7      12.8       2.9       24.7       5.8        1.5       -77.3      -74.1
 Other products                                             272.5     305.7      218.3                  -28.6
Imports                                                   2,617.9   3,318.6    2,442.3                  -26.4
 Human food                 4,060.6   3,933.7   2,810.7   2,040.9   2,600.9    1,593.2       -28.5      -38.7
of which : .Cereals         3,159.0   3,050.6   1,976.8   1,194.0   1,481.1      629.5       -35.2      -57.5
of which :
  -Soft wheat               1,122.5   1,107.9    798.6      404.2      518.9    232.9       -27.9       -55.1
  -Hard wheat                 609.2     658.8    433.9      333.4      475.5    200.7       -34.1       -57.8
  - Corn                      618.3     749.2    664.5      180.2      272.5    170.9       -11.3       -37.3
  - Barley                    787.7     509.8     65.6      265.9      194.3      15.9      -87.1       -91.8
 .Sugar                       353.7     324.3    302.3      158.8      162.3    184.1        -6.8        13.4
 .Vegetable oils              187.9     254.7    165.5      183.5      404.8    187.9       -35.0       -53.6
 .Milk and dairy products      15.5      24.1     14.7       49.1       79.5      44.4      -39.0       -44.2
 .Meat                          4.4       5.2      5.5       18.7       27.1      28.4        5.8         4.8
 .Tea                           9.3      10.4      9.8       18.0       23.8      24.2       -5.8         1.7
 .Coffee                       12.6      16.9     14.5       31.4       52.6      36.5      -14.2       -30.6
 .Bananas                      41.0      33.5     37.1       14.7       11.4      13.8       10.7        21.1
 .Potatoes                    102.5      19.7     75.7       66.1       19.7      50.1     284.3        154.3
 .Various prepared food         6.0       7.3      7.0       55.2       62.0      71.6       -4.1        15.5
 Other products                                             577.0      717.7    849.1                    18.3
 of which: Soy bean cakes    257.8     266.9     190.8      103.1      148.8    110.8       -28.5       -25.5
 .Raw tobacco                  7.9       8.7      14.2       29.2       35.8      78.5       63.2       119.3
Food balance                                               -425.4     -751.0      38.0                 -105.1
Rate of coverage (in %)                                      79.2       71.1    102.4                31.3 pts
Overall balance                                            -729.9   -1,163.0   -592.8                   -49.0
Rate of coverage (in %)                                      72.1       65.0      75.7               10.7 pts
                                                                          Source : National Statistics Institute

Purchases of soft wheat, mainly from the Ukraine, Russia and France, went down by 55.1%
in terms of value (after increasing by 28.4% the year before) and 27.9% in terms of quantity.
Imports of hard wheat (especially from Canada, Greece and Italy) also showed a drop of
57.8%, following an increase of 42.6% a year earlier. Imports of barley and corn went down
respectively by 91.8% and 37.3% in terms of value and by 87.1% and 11.3% in terms of
volume.
                                                   129
Imports of vegetable oil for human consumption (some 65% of which were handled by the
national oil Board) fell by 53.6% in terms of value and by 35% in terms of quantity. Argentina
was the primary supplier with a 35.6% share, followed by Russia (27.3%), the United States
(8.3%) and Ukraine (7%).
Purchases of milk and dairy products, mainly from France (37.1%), Brazil (10.3%) and
Holland (9.4%) also fell by 44.2%, following a 39% drop in quantity.
Imported coffee, mostly from Brazil (37.3%), Vietnam (34.2%) and Tanzania (11.2%),
decreased by 30.6% in terms of value and 14.2% in terms of tonnage.
Inversely, purchases of certain products went up under the influence of higher volume. This
was the case for potatoes (+154.3%), bananas (+21.1%) and meat (+4.8%). Imports of sugar
also posted an increase of 13.4%, due mainly to higher prices. Imported tonnage of sugar
came principally from Brazil (64.3%), Holland (15.9%) and Columbia (11.5%).
2. ENERGY
Trade in the energy sector reflected fluctuations in international prices for hydrocarbons.
These prices started the year at around USD 40 a barrel, then rose to a range of between
70 and 80 dollars. These levels however remained well below the USD 147 figure posted in
the summer of 2008.
BALANCE OF TRADE IN THE ENERGY SECTOR
                                                                                         Variat. 2009/2008
                    Quantity in 1,000 tonnes                Value in MTD
   Description                                                                                  in %
                     2007     2008      2009        2007        2008          2009      Quantity Value
Exports                                             3,137.8     4,079.9      2,637.7                     -35.3
 Crude oil          3,971.3   3,438.2   3,531.6     2,631.8     3,218.8      2,093.3          2.7        -35.0
 Refined products     825.6     914.7     910.7       506.0       861.1        544.4         -0.4        -36.8
Imports                                             3,001.6     4,913.8      2,789.7                     -43.2
 Crude oil          1,110.5   1,234.7   1,106.0       746.1     1,149.4        676.2       -10.4         -41.2
 Refined products   2,688.4   2,992.5   2,576.0     1,936.1     3,083.5      1,691.4       -13.9         -45.1
 Natural gas          843.2   1,244.1   1,102.2       315.4       672.3        416.3       -11.4         -38.1
 Coal from coke        10.8      20.0      14.6         4.0         8.6          5.8       -27.0         -32.6
Overall balance                                       136.2      -833.9       -152.0                     -81.8
Rate of coverage
(in %)                                                  104.5     83.0         94.6                   11.6 pts
                                                                          Source : National Statistics Institute

At the national level, the deficit in the balance of energy narrowed by 681.9 MTD (81.8%),
accounting for 2.4% of the country’s overall deficit, compared to 12.6% a year earlier, while
the rate of coverage increased by 11.6 percentage points to 94.6%. This trend was the result
of a 35.3% (1,442.2 MTD) drop in exports and a 43.2% (2,124.1 MTD) decrease in the
energy bill, compared to respective increases of 30% and 63.7% in 2008.
Trade in the energy sector, all of which took place under the general regime, accounted for
13.5% of overall exports and 10.8% of imports, compared to 17.3% and 16.2% a year earlier.
The drop in sales took place despite an increase in overall quantities exported. Still, broken
down by category of product, tonnage of crude oil went up by 2.7% or 93,400 tonnes, while
that of refined products dropped slightly. There was an increase in exported quantities of
crude oil, despite the drop in national production, following exhaustion of reserves at
El Borma, one of the country’s main oil fields.
                                                  130
Sales of crude oil fell by 35% to 2,093.3 MTD, shipped to the European Union (particularly
France and Italy) as well as Switzerland and Canada.
The 36.8% (316.7 MTD) reduction in sales of refined products was the reason behind the
22% drop in exports by the sector, shipped principally to Great Britain, Germany and
Switzerland.
Import figures fell for all energy products but especially refined products, arriving for the most
part from Russia, Malta and Italy, going down both in terms of value (-45.1%) and quantity
(-13.9%). Purchases of crude oil, almost exclusively from Libya, decreased by 41.2% or
473.2 MTD, due to a drop in prices and to a lesser degree in quantities (-10.4% or -128,700
tonnes). Imports of natural gas (exclusively from Algeria) also went down, by 38.1% in terms
of value and by 11.4% in terms of volume.
3. MINING, PHOSPHATES AND PHOSPHATE-BASED PRODUCTS
After a year of exceptional results, trade in mining, phosphates and phosphate-based
products posted a drop in 2009 that was closely linked to the drop in international prices.
Exports fell to 1,660.2 MTD, down by 50% after 2008’s increase of 129.5%, representing
some 40% of the drop in overall exports. The share of sales by this sector in overall exports
fell from 14.1% in 2008 to 8.5% in 2009. Imports which almost quadrupled in 2008, fell by
69.6% to 527.2 MTD in 2009. Their share in overall imports also fell by 3.7 percentage points
from 5.7% to 2%. The drop in exports and imports yielded a 455.3 MTD (28.7%) reduction in
the trade surplus.
The drop in average export prices expressed in US dollars ranged between 48.6% for
dicalcium phosphate (DCP) and 68.4% for phosphoric acid. Still, the impact of lower prices
on export receipts would have been greater if it had not been for the higher quantities shipped.
Sales of diammonium phosphate (DAP), which more than doubled in 2008, posted a decrease
of 53.3% or 572.1 MTD despite a 29.2% (256,500 tonne) increase in quantity. This product
was exported mainly to Turkey (28.9%), Italy (14.9%), India (13.7%) and China (11.1%).
Exports of phosphoric acid, shipped largely to India (57.1%) and France (11.5%), went down
by 52.9% or 469.2 MTD, compared to an increase of 158% or 543.3 MTD in 2008, while
sales in terms of quantity went up by 26.2% or 173,300 tonnes.
Sales of triple superphosphate (TSP), which had enjoyed a sizeable increase of 136.1% or
442.1 MTD in 2008, fell in 2009 by 50.8% or 389.4 MTD, with tonnage up by 15.1% or
112,500 tonnes. The main markets for this product were Iran (43.5%), Brazil (26.1%) and
Bangladesh (10.9%).
For lime phosphate, the 154.2% (109.5 MTD) increase in exports in 2008 was followed in
2009 by a drop in both value (-69.6% or -125.6 MTD) and quantity (-44.2% or
-388,200 tonnes). The main destinations were Poland (42.8%), Turkey (12.3%) and New
Zealand (10.9%).
The sector’s other products also showed a drop in sales. This involved dicalcium phosphate
which was down by 27.8% or 52.7 MTD and tripolyphosphate sodium, down by 30% or
51.3 MTD, despite respective increases in exported volume of 51.8% and 13.8%.

                                               131
82% of the drop in imports was due to an 85.8% (986.7 MTD) drop in purchases of non
refined sulphur, a raw material that is essential to production of phosphate-based products.
This was caused by the combined effect of lower imported quantities (-13.5% or
-239,400 tonnes) and of lower average purchase prices expressed in US dollars
(-90%). The main suppliers were Kuwait (24.5%), Russia (22.6%), the United Arab Emirates
(17.8%) and Kazakhstan (15.4%).
Purchases of ammoniac also went down in terms of value, by 41.6% or 88.3 MTD after
having doubled a year earlier. There was however an increase in imports in terms of
quantity, up by 18.3% or 50,500 tonnes. Russia provided 85.9% of this basic raw material
used in production of phosphate-based products.
Other products also posted a drop in the value of purchases, despite higher quantity. This
was the case for oil bitumen (-33.6% or -50.5 MTD) and fertiliser (-19% or -7.2 MTD). The
main sources for supply of oil bitumen were Italy (48.8%), the United States (29.6%) and
Spain (19%). Fertiliser was imported in particular from Russia (37.6%).
BALANCE OF TRADE IN MINING, PHOSPHATES AND PHOSPHATE-BASED PRODUCTS
                                                                                          Variat. 2009/2008
                       Quantity in 1,000 tonnes                  Value in MTD
    Description                                                                                  in %
                        2007      2008      2009         2007       2008        2009      Quanti. Value
Exports                                               1,447.8      3,322.8     1,660.2                  -50.0
 Fertiliser             1,863.0   1,677.0   2,029.7     845.9      1,865.3       890.0       21.0       -52.3
  .Triple superphosph     819.7     746.6     859.1     324.9        767.0       377.6       15.1       -50.8
  .DAP                    977.7     877.7   1,134.2     508.6      1,074.3       502.2       29.2       -53.3
  .Other chemical
   fertiliser              65.6     52.7      36.4        12.4        24.0        10.2       -30.9      -57.5
 Phosphoric acid          900.3    661.6     834.9       343.9       887.2       418.0        26.2      -52.9
 Tripolyphosphate
sodium                    180.8    152.4     231.3        68.3       189.5     136.8        51.8        -27.8
 Dicalcium phosphate      123.4    107.5     122.3        99.0       171.1     119.8        13.8        -30.0
 Lime phosphate         1,236.7    879.1     490.9        71.0       180.5       54.9      -44.2        -69.6
 Other products                                           19.7        29.2       40.7                    39.4
Imports                                                  490.5     1,734.5     527.2                    -69.6
 Non-refined sulphur    1,390.4   1,775.8   1,536.4      154.1     1,150.2     163.5       -13.5        -85.8
 Ammonium nitrate         276.0     276.2     326.7      104.2       212.4     124.1        18.3        -41.6
 Oil bitumen              445.3     489.1     524.7       97.5       150.1       99.6        7.3        -33.6
 Fluorine spa              79.4      74.3      12.0       22.5        26.9         4.2     -83.8        -84.4
 Phosphoric acid           99.8      79.5      76.4       34.5       104.7       60.4       -3.9        -42.3
 Fertiliser                95.4      52.2      70.8       42.8        37.8       30.6       35.6        -19.0
 Other products                                           34.9        52.4       44.8                   -14.5
Balance                                                  957.3     1,588.3   1,133.0                    -28.7
Rate of coverage (in %)                                  295.2       191.6     314.9                123.3 pts
                                                                          Source : National Statistics Institute
4. TEXTILE-CLOTHING SECTOR
After a year of virtual stagnation, exports by the textiles/clothing sector went down by 8.7% or
451.6 MTD. Nonetheless, their share in overall exports rose by 2.4 percentage points to
24.3%. There were considerably lower sales (-8.8%) under the offshore regime, which
accounted for 97.7% of the sector’s exports. Under the general regime, the drop in sales was
just 3.7%, compared to a sharper drop the previous year (-17.2%).
The drop in exports would have been greater if it had not been for recovery in early
July 2009, after a first half marked by falling sales as a result of the world economic and

                                                   132
financial crisis that hit European countries. Analysis of exports by product shows an 11.3%
drop in sales of clothing and accessories, 15.5% in sales of fabric, and 1.1% in sales of
hosiery articles.
Tunisia remained the European Union’s fifth largest supplier of clothing, behind a number of
southeast Asian countries and Turkey. The geographic breakdown of exports to the
European Union shows that France remained Tunisia’s primary client, with a share of almost
35% despite lower sales, followed by Italy, Germany, Belgium and Holland. Aside from the
European Union, the United States was the primary destination, followed by Ethiopia (which
buys mainly used clothing) and the countries of the Arab Maghreb Union, notably Libya and
Algeria.
As for imports, the rate of decrease (-8.4%) was quite near that of exports, but greater than
in 2008 (-1.1%). Still, the share of the sector in the country’s overall imports went up slightly,
from 11.5% to 12.3%. Tunisia’s main suppliers were Italy with a 31.5% share, followed by
France (24.6%), Germany (6.2%), and Belgium (6%). Turkey was in fifth place with 5.9% and
China was in seventh place with 3.9%.
BALANCE OF TRADE IN THE TEXTILE AND CLOTHING SECTOR
                                                                                       Variat. 2009/2008
                     Quantity in 1,000 tonnes                 Value in MTD
    Description                                                                               in %
                      2007      2008      2009         2007      2008        2009      Quant.     Value
Exports                                                5,187.9   5,180.1     4,728.5                 -8.7
 Clothing and
  accessories         78.1      72.5      61.3         3,461.4   3,397.0     3,013.5   -15.4       -11.3
 Hosiery              30.7      30.3      27.1         1,094.9   1,190.9     1,177.4   -10.6        -1.1
 Fabric               19.3      17.1      12.0           154.6     135.9       114.8   -29.8       -15.5
 Apparel & used
 clothing             55.3      53.7      53.8          371.0     347.9       328.3       0.2        -5.6
 Textile yarn and
  thread              13.7      12.2      10.7            81.1      91.0        80.2   -12.3       -11.9
 Others                                                   24.9      17.4        14.3               -17.8
Imports                                                3,521.5   3,481.6     3,188.3                -8.4
 Fabric              118.7     119.8     118.5         2,065.8   2,085.4     1,880.3     -1.1       -9.8
 Clothing and
  accessories         19.3      15.9      15.2          603.6     588.5       541.8      -4.4        -7.9
 Hosiery              13.2      11.2      12.0          324.4     301.5       290.3       7.1        -3.7
 Textile yarn and
  thread              52.7      49.0      43.4          257.4     251.3       220.6    -11.4       -12.2
  Apparel & used
 clothing            103.8     115.4     120.2           111.3     123.5       138.6     4.2        12.2
 Cotton in bulk       22.3      13.3       7.5            40.0      27.9        14.0   -43.6       -49.8
 Others                                                  119.0     103.5       102.7                 -0.8
Balance                                                1,666.4   1,698.5     1,540.2                 -9.3
Rate of coverage                                                                                     -0.5
(in %)                                                  147.3     148.8     148.3                 point
                                                                       Source : National Statistics Institute

Trends in imports by product were marked by a drop in purchases virtually across the board.
Import of manufactured articles and used clothing were among the few products that posted
an increase (+12.2%), following higher quantities purchased.
Fabric, used in particular to manufacture finished products for export, accounted for some
70% of the drop in imports. It nevertheless remained in the top ranking of imported products,
with a share of 59%. Imported clothing, accessories and hosiery items (most of which are
destined for the local market) also posted drops of 7.9% and 3.7% respectively. The drop
involved textile yarn and thread (-12.2%) and bulk cotton (-49.8%).
                                                 133
In this context, the traditionally surplus balance for the sector went down by 158.3 MTD or
9.3% and the rate of coverage dropped only slightly to about 148%.
5. LEATHER AND FOOTWEAR
The drop in exports (9.6%) and in imports (1.4%) in the leather/footwear sector took place
after respective increases of 3.4% and 8.4% in 2008, leading to an 80.3 MTD (24.8%)
narrowing of the surplus balance and a 12.9 percentage point drop in the rate of coverage.
Yet, the sector’s share in overall trade increased by 0.4 percentage point for exports (4.3%
vs. 3.9%) and by 0.3 point for imports (2.3% vs. 2%).
The drop in exports was due in particular to the 9.9% drop in sales under the offshore
regime, which account for more than 96% of sales by the sector, after rising by 3.2% in 2008.
Under the general regime, exports dropped by 1.8%, after an increase of 6.6% a year earlier.
By product, exports of footwear and components accounted for 83.2% of the sector’s sales
and recorded a drop of 7.2% to 690.4 MTD. Sales of skins/leather and leather goods also
dropped by 19.4% and 20.1% respectively.
BALANCE OF TRADE IN THE LEATHER AND FOOTWEAR SECTOR
                                                                                      Variat. 2009/2008
                         Quantity in 1,000 tonnes           Value in MTD
     Description                                                                             in %
                         2007     2008     2009     2007       2008        2009       Quant. Value
Exports                                             888.4      918.2        829.6                  -9.6
 Skins and leather         4.5     3.4      1.9      32.7       34.6         27.9      -44.1      -19.4
 Leather goods             2.0     2.5      1.8     100.5      115.4         92.2      -28.0      -20.1
 Footwear                 25.3    23.0     20.4     737.0      743.9        690.4      -11.3       -7.2
 .Shoes uppers & parts     4.1     4.0      3.6     231.5      240.3        217.9      -10.0       -9.3
 .Shoes                   21.2    19.0     16.8     505.5      503.6        472.5      -11.6       -6.2
 Others                                              18.2       24.3         19.1                 -21.4
Imports                                             548.6      594.7        586.4                  -1.4
 Skins and leather        12.7    12.9     11.5     328.4      350.8        310.0      -10.9      -11.6
 Leather goods             2.6     2.6      2.6      30.4       33.4         34.7        0.0        3.9
 Shoes                     9.1     8.6      9.0     161.5      174.0        202.6        4.7       16.4
 .Shoes uppers & parts     7.3     7.7      8.2     146.0      155.7        179.5        6.5       15.3
 .Shoes                    1.8     0.9      0.8      15.5       18.3         23.1      -11.1       26.2
 Others                                              28.3       36.5         39.1                   7.1
Balance                                             339.8      323.5        243.2                 -24.8
Rate of coverage
(in %)                                              161.9      154.4       141.5                 -12.9 pts
                                                                       Source : National Statistics Institute

Exports of footwear and their components were shipped mainly to Italy (57.7%) then France
(24%), Germany (12.2%) and Spain (2.2%).
The drop in imports by the sector was due to purchases of skins and leather that were 11.6%
lower. On the other hand, purchases of footwear, uppers and parts went up by respective
rates of 26.2% and 15.3%.
Provision to Tunisia of skins and leather was handled in particular by the countries of the
European Union, particularly Italy (59.7%) and France (26%). Aside from the EU, India,
Brazil and Pakistan were the main suppliers, with respective shares of 2.2%, 0.9% and 0.5%.
Of imported footwear and components, 45.5% came from Italy, 22.8% from Germany, and
15.8% from France.
                                              134
6. MECHANICAL AND ELECTRICAL INDUSTRIES
Mechanical and electrical industries recorded a slight drop of 3.7% for exports and a virtual
stagnation for imports (+0.1%), compared to respective increases of 18.3% and 14.3% in
2008. The result was 241.1 MTD or 4.2% widening of the trade deficit and a 2 percentage
point drop in the rate of coverage to 50.3%. The sector did however increase its share in
overall exports by 4.5 percentage points (30.8% vs. 26.3%) as well as in overall imports
(46.1% vs. 39.4%). 86.4% of exports took place in the framework of the offshore regime,
while 72.7% of imports were handled under the general regime.
BALANCE OF TRADE IN MECHANICAL AND ELECTRICAL INDUSTRIES
                                                                  (In MTD unless otherwise indicated)
                                                                         Variation in %
        Description             2007        2008         2009
                                                                    2008/2007     2009/2008
 Exports                       5,266.8      6,232.8     6,001.0         18.3                -3.7
 Imports                      10,431.4     11,920.3    11,929.6         14.3                 0.1
 Balance                      -5,164.6     -5,687.5    -5,928.6         10.1                 4.2
 Rate of coverage (in %)          50.5         52.3        50.3       1.8 point         -2 points
                                                                  Source : National Statistics Institute

Exports and imports by mechanical industries fell by 6.1% and 3.4% in 2009 respectively,
after going up by 14.7% and 15.1% in 2008. The trade deficit thus narrowed by 144.2 MTD
or 2.4%, after having widened by 808.4 MTD or 15.2% a year earlier, while the rate of
coverage dropped by 0.7 percentage point to 27.2%.
For exports, the drop was due mainly to lower sales of cast iron, iron and steel (-50.3% vs.
+10.4% in 2008), shipped especially to the countries of the European Union such as France
(32.2%), Spain (14.9%) and Italy (10.2%). Exports of copper and copper articles, going mainly to
Spain (37.3%), Germany (21.7%) and Belgium (12.2%), also went down (-48.9% vs. +16.7%).
Sales of aluminium and aluminium articles, notably to Libya (35%), France (21.9%), Italy (9.9%)
and Algeria (8.2%) also recorded a drop of 19.4% in 2009 vs. +38.4% a year earlier.
The drop in exports involved iron and steel springs (-38.3%), other apparatus for vehicles
(-22.6%) and articles made of common metals (-8.9%).
On the other hand, sales of mechanical apparatus and devices went up by 5.2%, particularly
to France (25.2%), Italy (19.2%), Libya (18.5%) and Algeria (9.8%). This was also the case
for exports of metal works (+20.5%) and tubing/pipes/accessories (+37.9%).
The drop in imports was due mainly to lower purchases of cast iron, iron and steel (-46.8%),
for the most part from Italy (20.6%), the Ukraine (13.3%) and Russia (11.5%). Purchases of
copper and copper articles arrived in particular from Italy (43.3%) and Germany (32.3%), as
did tools and electromechanical cables, which dropped by 20.3% and 14.9% respectively.
Inversely, other products posted a higher level of imports, mainly mechanical apparatus and
devices (+8.7%) and transport material (+13.7%).
Exports by electrical industries went down by 2.2% after rising by 20.7% in 2008, while
imports increased more slowly than the year before : 8.7% vs. 12.4%. The trade surplus fell
by 385.3 MTD or 87.8%, after having almost tripled in 2008 to 438.7 MTD. Lower exports
involved mainly parts for electrical apparatus (-42.6%), switches and circuit breakers (-8.2%),
electrical transformers (-26.1%), and computer hardware (-19%).
Higher sales of certain products such as electrical wires and cables (+7.3%) and electrical
apparatus for telephony (+15%) helped offset the drop in exports by the sector.

                                              135
BALANCE OF TRADE IN MECHANICAL INDUSTRIES
                                 Quantity in 1,000 tonnes              Value in MTD              Variat.2009/2008
      Description                                                                                      in %
                                  2007      2008      2009      2007       2008        2009      Quant. Value
Exports                                                        2,071.4    2,375.5     2,230.0                   -6.1
-Transport equipment                                             551.0      536.6       527.3                   -1.7
 of which : vehicles,
  cycles & tractors                56.7      52.9      48.5      481.8      469.2       477.7        -8.3        1.8
-Cast iron, iron, steel and
finished prod. of which :         391.6     382.1     285.0      546.7      667.4       585.2      -25.4       -12.3
* Cast iron, iron & steel         286.9     260.6     154.4      254.9      281.5       139.9      -40.8       -50.3
* Metal structures                 32.6      45.7      45.9       81.4      124.4       149.9        0.4        20.5
* Iron and steel springs           16.9      19.1      10.9       56.6       67.3        41.5      -42.9       -38.3
* Tubing, pipes and
  accessories                      18.5      14.1      22.5       34.4       44.8        61.8       59.6        37.9
-Mechanical apparatus
and devices                        34.9      39.1      38.3      416.0      537.4       565.2       -2.0        5.2
-Optics, scientific equip.          2.5       4.6       6.2      119.8      168.7       170.3       34.8        0.9
-Cables & optical fibres            0.9       0.2       0.8       48.8        4.2        12.7      300.0      202.4
-Copper & copper articles          10.4      11.9       7.6       79.7       93.0        47.5      -36.1      -48.9
-Aluminium and finished
  products                         17.8      18.7      14.7       94.8      131.2       105.7      -21.4       -19.4
-Common metal works                 7.8       6.1       5.7       43.0       48.2        43.9       -6.6        -8.9
-Other apparatus for
  vehicles                           1.2       1.4       1.1      46.8       50.1        38.8      -21.4       -22.6
-Other products                                                  124.8      138.7       133.4                   -3.8
Imports                                                        7,389.2    8,501.7     8,212.0                   -3.4
-Cast iron, iron, steel &
finished products, of wh :       1,545.1   1,444.7   1,080.3   1,732.2    2,201.9     1,493.6      -25.2       -32.2
* cast iron, iron & steel        1,380.5   1,251.0     916.3   1,048.1    1,407.2       749.1      -26.8       -46.8
* Tubing, pipes and
  accessories                      88.2     109.0      75.2      374.8      356.8       296.1      -31.0       -17.0
* Other iron and steel-
  made products                    12.7      17.3      18.9       93.5      138.5       136.0        9.2        -1.8
* Metal structures                 15.0      19.7      25.8       56.7       72.9       130.1       31.0        78.5
-Tools                              6.1       6.1       7.5       99.6      109.8       107.7       23.0        -1.9
-Machines, mechanical
  devices of which :              193.9     184.9     186.0    2,282.4    2,834.4     3,081.1         0.6        8.7
* Hoisting, drilling and
  handling equipment               29.7      46.8      51.7      298.4      528.5       603.1       10.5        14.1
* Turbines, engines and
turbo jets                          8.7       8.6      10.4      239.6      222.1       339.2       20.9        52.7
* Pomps & compressors              14.1      16.4      18.7      276.5      261.6       248.2       14.0        -5.1
* Machines with specific
tasks                              10.0       9.9        8.7     217.5      230.2       225.1      -12.1       -2.2
* Sewing machines/units             2.5       3.2        2.0      62.3       67.4        45.0      -37.5      -33.2
* Fridges and freezers             10.2      12.1        9.7      75.4       94.0        90.7      -19.8       -3.5
* Bearings and taps                 9.0       8.5        7.3     175.0      180.1       172.8      -14.1       -4.1
* Textile machinery                 2.3       3.4        2.5      44.6       54.3        36.9      -26.5      -32.0
* Agricultural machinery            3.3       3.8        5.3      25.3       28.4        41.4       39.5       45.8
-Transport equipment of wh:                                    2,002.8    2,037.5     2,316.5                  13.7
* Air transport                                                  252.4       96.9       296.0                 205.5
* Maritime transport                                              23.3       12.8        11.9                  -7.0
* Vehicles, cycles and
  tractors, of which :            122.5     133.4     135.8    1,606.9    1,832.7     1,948.4         1.8        6.3
 . Private cars                    45.1      48.3      47.4      709.0      809.3       871.8        -1.9        7.7
 . Frames/bodies and
hardware                           29.6      27.7      23.9      354.8      387.9       339.0      -13.7       -12.6
 . Lorries & small trucks          18.4      21.9      27.0      347.8      367.0       440.4       23.3        20.0
 . Tractors                         7.6      10.0       9.7       77.6      110.5       108.0       -3.0        -2.3
 . Public transport vehicles        1.2       1.1       1.1       16.1       14.2        17.0        0.0        19.7
-Optical & scientific material      4.6       5.4       4.5      285.7      306.4       337.2      -16.7        10.1
-Copper and copper
  articles                         42.7      48.1      46.8      404.9      454.9       362.6        -2.7      -20.3
-Aluminium and finished
products                           29.9      37.7      36.6      158.0      197.4       197.6        -2.9        0.1
-Tools and electro-
  mechanical cables                  7.0       5.7       5.2      157.9     137.3      116.8        -8.8       -14.9
-Other products                                                   265.7     222.1      198.9                   -10.4
Balance                                                        -5,317.8   -6,126.2   -5,982.0                   -2.4
Rate of coverage (in %)                                            28.0       27.9       27.2               -0.7 point
                                                                                 Source : National Statistics Institute

                                                         136
Imports that went up at a slower pace than the year before involved essentially electrical
apparatus for telephony (+32.2% vs. +50.7% in 2008) as well as integrated circuits and
micro-assemblies (+9.5% vs. +13.5%). The drop in purchases of switches and circuit
breakers (-14.6%) and of electrical wires and cables (-15.3%) also contributed to slower
growth in imports.
BALANCE OF TRADE IN ELECTRICAL INDUSTRIES
                   Quantity in 1,000                                                Variat. 2009/2008
                                          Value in MTD
   Description         tonnes                                                              in %
                  2007 2008 2009     2007     2008     2009                        Quantity       Value
Exports                                            3,195.4   3,857.3    3,771.0                      -2.2
Electrical machines
and apparatus              124.9   146.2   149.4   2,959.7   3,636.7    3,584.8        2.2           -1.4
 of which :
* Electrical cables and
   wires                    56.7    74.1    80.4     954.3   1,249.9    1,340.8        8.5            7.3
* Switches and circuit
   breakers                 17.3    22.8    23.7     604.6    775.0       711.3        3.9           -8.2
* Electrical apparatus
   for telephony             3.7     4.3     4.6     251.1    289.0       332.4        7.0           15.0
* Parts for electrical
   apparatus                 5.0     5.6     2.7     228.6    253.1       145.3      -51.8          -42.6
* Integrated circuits and
   micro assembly            3.2     2.8     2.3     194.5    160.6       140.0      -17.9          -12.8
* Electricity transformers   9.3     7.0     5.2     170.4    155.8       115.2      -25.7          -26.1
* Microphones and
   loudspeakers              4.8     4.2     2.1      69.9     54.4        40.7      -50.0          -25.2
Computer hardware            0.4     0.5     0.8     118.7    129.5       104.9       60.0          -19.0
Optical products and
scientific apparatus         0.9     0.8     0.8      33.1      32.9       33.3        0.0            1.2
Fridges and Freezers         1.7     1.6     1.0       7.3       6.9        5.2      -37.5          -24.6
Other products                                        76.6      51.3       42.8                     -16.6
Imports                                            3,042.2   3,418.6    3,717.6                       8.7
Electrical machines
and apparatus,              97.7   104.9   105.4   2,370.8   2,728.6    2,994.4        0.5            9.7
 of which :
* Switches and circuit
   breakers                 16.7    17.8    13.7     480.7    532.0       454.1      -23.0          -14.6
* Electrical cables and
   wires                    18.0    24.0    19.9     342.9    451.1       382.1      -17.1          -15.3
* Parts for electrical
   apparatus                15.9    14.3    15.1     443.3    388.8       370.7        5.6           -4.7
* Electrical apparatus for
   telephony                 1.9     2.7     3.1     225.4    339.6       449.1       14.8           32.2
* Integrated circuits and
   micro assembly            1.9     2.2     1.8     205.2    232.9       255.0      -18.2            9.5
* Electricity transformers   9.4     9.3    10.1     133.6    165.4       224.0        8.6           35.4
* Boards and control
   boxes                     0.9     0.8     1.0      55.8     39.1        69.1       25.0           76.7
Computer hardware            7.2     7.5     8.0     497.6    530.0       574.8        6.7            8.5
Optical products and
scientific apparatus         2.9     3.1     2.2     135.1    111.3      112.3       -29.0            0.9
Other products                                        38.7     48.7        36.1                     -25.9
Balance                                              153.2    438.7        53.4                     -87.8
Rate of coverage (in%)                               105.0    112.8      101.4               -11.4 points
                                                                       Source : National Statistics Institute
7. OTHER MANUFACTURING INDUSTRIES
The sector grouping other manufacturing industries is made up of building mate-
rials/ceramics/glass chemical products other than phosphate-based products and miscel-
laneous manufacturing industries and it was the only sector that posted growth, although
                                                   137
only at a low level of +0.9%, compared to +9.7% in 2008. This development was based on a
22.2% increase in sales under the offshore regime. Exports under the general regime, which
represented 47.1% of overall sales vs. 56.3% in 2008, went down by 15.7% after having
increased by 27.1% a year earlier. Imports grew at a slower pace than in 2008 : 3.2% vs. 11.8%.
BALANCE OF TRADE IN OTHER MANUFACTURING INDUSTRIES
                                                                                                Variation
                              Quantity in 1,000 tonnes             Value in MTD                 2009/2008
       Description
                                                                                                  in %
                                2007      2008      2009      2007        2008       2009     Quant Value
Exports                                                      1,592.9    1,747.6     1,762.7                 0.9
Building materials, ceramics
and glass, of which :                                          330.5      396.7       369.1                -7.0
 * Cement                      1,550.4   1,668.6   1,094.8     151.7      187.4       132.8     -34.4     -29.1
 * Ceramics                      195.1     221.3     416.6      91.4       93.7       108.7      88.3      16.0
Chemical products of which :                                   476.6      490.1       494.3                 0.9
 * Essential oils and perfume     11.2     10.2       9.0       78.8       84.1        74.6     -11.8     -11.3
 * Aluminium fluoride             49.0     42.9      39.9       69.9       75.4        63.4      -7.0     -15.9
 * Rubber & rubber products       11.8     10.6       9.2       65.6       64.1        62.9     -13.2      -1.9
 * Tanning agents and paints      29.4     17.2      24.1       29.7       24.5        33.3      40.1      35.9
 * Soap, care products            20.7     17.7      17.8       32.9       27.6        30.5       0.6      10.5
 * Pharmaceutical products         2.6      0.9       1.3       26.1       29.7        41.2      44.4      38.7
 * Calcium carbonate             140.2    170.3     274.3       10.5       13.2        13.6      61.1       3.0
Miscellaneous manufacturing
industries, of which :                                         785.8      860.8       899.3                 4.5
 * Plastics materials and
worked goods                      75.2     76.4      90.0      343.4      379.0       395.3      17.8       4.3
 * Toys, games & sport wear        1.1      1.4       1.3       27.9       34.0        36.7      -7.1       7.9
 * Furniture, bedding and
    lustres                        6.6       6.4       7.6      37.3       44.3        58.6      18.8      32.3
 * Cork and worked goods           4.7       4.2       3.1      12.0       11.4        10.5     -26.2      -7.9
Imports                                                      3,825.8    4,277.7     4,414.1                 3.2
Building materials, ceramics
and glass, of which :                                          218.6      279.6       313.6                12.2
 * Ceramics                       51.7     64.5      64.2       47.2       63.4        68.7      -0.5       8.4
 * Glass & glassware              59.5     67.7      81.0       77.1       95.8       118.6      19.6      23.8
 * Cement                         13.2     52.7      99.2        8.0        8.5        10.9      88.2      28.2
 * Kaolin and other clays        127.6    187.0     165.5       19.7       29.4        26.7     -11.5      -9.2
 * Marble                         77.4    101.2     102.2        7.9       10.2        10.2       1.0       0.0
Chemical products of which:                                  2,277.9    2,519.8     2,595.6                 3.0
 * Pharmaceutical products         5.4       7.1       6.3     405.3      459.6       575.1     -11.3      25.1
 * Chemical products
   (antibiotics and others)       66.8     75.3      81.9      268.3      324.3       334.1       8.8       3.0
 * Miscellaneous chemical
    products (insecticide and
    others)                       53.6     48.4      41.7      202.9      211.0       208.5     -13.8      -1.2
 * Rubber & rubber products       21.0     23.5      24.0      143.6      166.1       169.2       2.1       1.9
 * Tanning agents and paints      46.3     47.5      52.6      147.6      151.2       172.4      10.7      14.0
 * Essential oils and perfumes     9.7     11.6       9.5       96.7      115.3       128.1     -18.1      11.1
 * Soap and care products         29.9     30.0      36.9       82.0       91.2       102.0      23.0      11.8
Miscellaneous manufacturing
industries of which :                                        1,329.3    1,478.3     1,504.9                 1.8
 * Plastic materials and
worked goods                     340.5    359.5     372.1     1,132.2    1,263.0 1,197.1         3.5       -5.2
Balance                                                      -2,232.9   -2,530.1 -2,651.4                   4.8
Rate of coverage (in %)                                          41.6       40.9      39.9              -1 point
                                                                             Source : National Statistics Institute


                                                    138
The deficit for this sector as a whole widened by 4.8% or 121.3 MTD (compared to 13.3% or
297.2 MTD in 2008) and the rate of coverage went down from 40.9% in 2008 to 39.9% in
2009. The share of the sector in overall trade rose from 7.4% to 9.1% for exports and from
14.1% to 17.1% for imports.
Exports by building materials/ceramics/glass industries went down by 7%, influenced
essentially by the 29.1% drop in sales of cement abroad, despite 16% growth in sale of
ceramic products. Imports went up by 12.2%, with 67.1% of this increase being attributable
to the 23.8% rise in purchases of glass and glassworks, mainly from Italy and France and
other countries such as China, Algeria, Turkey and Egypt.
As for chemical products, the slight increase in exports (+0.9%) involved in particular
pharmaceutical products (+38.7%), shipped mainly to Algeria, Libya, France, Jordan, Yemen,
Iraq, Senegal, the Ivory Coast and Niger. Sales of tanning products and paints as well as
soap and care products also went up, by 35.9% and 10.5% respectively. As for imports, the
3% increase was due mainly to the 25.1% rise in purchase of pharmaceutical products,
notably from France (41.2%), Switzerland (13.9%), Germany (7.8%), Italy (7.6%), Great
Britain (5%) and Denmark (3.4%).
Sales by miscellaneous manufacturing industries rose by 4.5%, especially after the 4.3%
increase in export of plastic materials and worked goods, for the most part to France
(41.7%), Italy (12.3%), Libya (9.4%) and Algeria (7.6%). Imports went up by 1.8%, remaining
marked by the predominance of purchases of plastic materials and worked goods,
accounting for about 80% of total vs. 85.4% in 2008.
C. TRENDS IN TRADE BY REGIME
Trends in trade in 2009 were marked by a lower deficit in trade transactions under the
general regime and by a higher surplus for transactions under the offshore regime.
1. GENERAL REGIME
The general regime’s balance of trade yielded a deficit of 10,535.5 MTD vs. 10,590.5 MTD in
2008, influenced by a drop in imports (-3,549.9 MTD) that was greater than that in exports
(-3,494.9 MTD). The rate of coverage thus went down by 9.3 percentage points to 41.9%.
Some 89% of the 31.5% drop in exports was attributable to the state of sales in
mining/phosphate/phosphate-based products (-50% vs. +129.5%) and energy (-35.3% vs.
+30%), all of which took place under the general regime. The drop in exports by
agriculture/fishing/agrofood industries (-12.3% vs. +17.1% in 2008) and other manufacturing
industries (-15.7% vs. +27.1%) also contributed to the overall drop in exports at 6.1% and
4.4% respectively.
The drop in imports (-16.4%) was due mainly to lower purchases by the energy sector
(-43.2%), mining/phosphates/phosphate-based products (-69.6%), agriculture/fishing/agro-
food industries (-26.5%), compared to 2008 increases of 63.7%, 253.6% and 26.4%
respectively a year earlier. The slower rate of increase for imports by the mechanical/electrical
sector (+4% vs. +16.1% in 2008) and by other manufacturing industries (+6.6% vs. +12.9%)
was also a factor explaining the lower level of imports.

                                              139
The share of the general regime in Tunisia’s overall trade narrowed by 7.9 percentage points for
exports (39% vs. 46.9% a year earlier) and by 1.6 percentage point for imports (70.1% vs. 71.7%).
BALANCE OF TRADE UNDER THE GENERAL REGIME                          (In MTD unless otherwise indicated)
                                                                             Variation (in %)
        Description              2007          2008         2009
                                                                          2008/2007    2009/2008
Exports FOB                     7,714.7      11,091.4       7,596.5           43.8            -31.5
Imports CIF                    16,330.4      21,681.9      18,132.0           32.8            -16.4
Balance                        -8,615.7     -10,590.5     -10,535.5           22.9             -0.5
Rate of coverage (in %)            47.2          51.2          41.9      4 points          -9.3 points
                                                                   Source : National Statistics Institute
2. OFFSHORE REGIME
The 140.8 MTD (3.5%) increase in the trade surplus under the offshore regime and the
6.7 percentage point rise in the rate of coverage (153.3% vs. 146.6% in 2008) were caused
by a drop in imports (-9.5% or -813.7 MTD) that was greater than the drop in exports (-5.4%
or -672.9 MTD).
Almost 80% of the drop in exports was attributable to lower sales of textiles/clothing-
leather/footwear (-9%), which represented 45.6% of total. Sales by mechanical/electrical
industries, the share of which came to 43.7% of exports handled under the offshore regime,
went down by 3.9% after an increase of 18.6% in 2008. This was also the case for sales by
the agriculture/fishing/agrofood sector (-21.7% vs. +4% a year earlier).
The drop in exports would have been greater without recovery in exports by the “other
manufacturing industries” sector (+22.2% vs. -6.8% in 2008). Some 82% of the drop in
imports was due to lower purchases by mechanical/electrical industries (-9.1%) and by
textiles/clothing-leather/footwear (-9.4%), representing 42.1% and 42.8% of overall imports
respectively.
BALANCE OF TRADE UNDER THE OFFSHORE REGIME                         (In MTD unless otherwise indicated)
                                                                              Variation in %
        Description              2007          2008         2009
                                                                          2008/2007    2009/2008
Exports FOB                    11,694.9      12,545.6      11,872.7           7.3            -5.4
Imports CIF                     8,106.9       8,559.3       7,745.6           5.6            -9.5
Balance                         3,588.0       3,986.3       4,127.1          11.1             3.5
Rate of coverage (in %)           144.3         146.6         153.3      2.3 points       6.7 points
                                                                   Source : National Statistics Institute
D. GEOGRAPHIC DISTRIBUTION
The structure of foreign trade remained marked by the predominance of Europe, which aside
from European Union countries and those of the European Free Trade Association (EFTA)
involved other countries such as Russia and Turkey. Europe was Tunisia’s leading trading
partner, with a share of some 74% of overall trade flows.




                                              140
                       GEOGRAPHICAL BREAKDOWN OF TRADE DURING 2009
                EXPORTS FOB                                                     IMPORTS CIF
                               Italy                                    Italy
                              21.0%                                    16.2%                  Germany
  France                               Germany
                                                                                               8.7%
  29.6%                                 8.8%             France                                         Other EU
                                                         20.6%                                          countries
                                                                                                         17.2%




                                       Other EU          Rest of the                                     America
  Rest of the                          countries           world                                          6.8%
    world                               14.4%             12.1%
   10.8%        Asia           UMA                                                  Asia           UMA
                5.0%          10.4%                                                12.5%           5.9%


Asia confirmed its emergence as Tunisia’s second largest supplier, thanks to ongoing growth
in imports from China and India. Africa, due for the most part to higher exports to the
countries of the Arab Maghreb Union, confirmed its standing as Tunisia’s second most
important client.
1. TRADE WITH EUROPE
Exports to this continent went down by 17.8% and imports by 13.5%. The deficit thus grew
by 8% or 286.8 MTD.
The European Union absorbed 73.8% of Tunisia’s overall exports and supplied 62.7% of its
imports. Trade showed a drop in exports at a faster pace than the drop in imports (-15.6% vs.
-6.3%). Thus the trade deficit widened considerably (by 303.8 MTD) to 1,869.8 MTD,
representing 29.2% of the overall deficit compared to just 4.6% in 2008.
Almost 66% of the drop in exports involved France and Italy, Tunisia’s top two trading
partners, while 94% of the drop in imports involved Italy alone.
With France, exports fell by 14.3% and imports by 4.5%. The surplus balance went down by
62% or 713 MTD to 436.6 MTD.
There were lower sales in particular for energy products, clothing and accessories other than
hosiery, and electrical apparatus and machines, while lower imports were due for the most
part to purchases of hydrocarbons, cereals, cast iron/iron/steel and railroad material.
Imports from Italy went down by 19.7%, notably after a drop in purchases of energy products,
cereals, and mechanical & electrical apparatus and machines. Exports to this country went
down at a slower pace than imports (-16.2%), which narrowed the deficit in bilateral trade by
73% or 240.6 MTD to 88.9 MTD.
Trade with Germany, Tunisia’s third most important trade partner, yielded a deficit of
539.1 MTD (vs. 471.9 MTD a year earlier), since exports grew more slowly than imports
(4.6% vs. 6.7%). This country was one of the few EU countries with which trade grew, both
for exports and imports.
With Spain, Tunisia’s fourth most important trading partner, there was virtual stagnation in
imports, along with a 43.3% decrease in exports, which yielded a wider trade deficit, up from
10.7 MTD in 2008 to 510.7 MTD in 2009.
                                                   141
Trade transactions with EFTA countries that include notably Switzerland and Norway yielded
a 50.5 MTD deficit (compared to a 356.9 MTD surplus in 2008), following a sharp 65.1%
decrease in exports along with an 18.7% increase in imports. Trends in trade with these
countries remained largely determined by trade flows with Switzerland, which represented
almost 92% of overall trade with this zone.
The share of other European countries in trade between Tunisia and Europe dropped
considerably, from 11.4% in 2008 to 7.3% in 2009. This drop was due to a sharp fall in both
exports and imports. Russia was the main source of the drop in imports, because of lower
purchases of energy products, sulphur and cereals. The drop in sales to Turkey, notably
phosphate products, was behind the more than 80% drop in exports to these countries.
2. TRADE WITH AFRICA
The balance of trade with Africa yielded a surplus of 702.2 MTD (compared to a deficit of
327.2 MTD in 2008), due to the combined effect of a 5.2% increase in exports and a 32.8%
drop in imports. Africa’s share in overall exports rose from 10.3% in 2008 to 13.1% in 2009,
while share in imports fell from 9.1% in 2008 to 7.2% in 2009.
Trade with Arab countries in Africa continued to be the predominant category, accounting
for 88.8% of total. The share of the countries of the Arab Maghreb Union (UMA) in trade with
Africa came to more than 80%, attesting to the high standing of this regional group in
Tunisia’s foreign trade.
The 8.3% increase in exports to UMA countries combined with a 34.5% drop in imports yielded
a trade surplus amounting to 514.6 MTD, compared to a deficit of 443.4 MTD in 2008.
Higher sales were attributable to a 21.8% increase in sales to Algeria, in line with higher
sales of goods worked in cast iron/iron/steel, plastic materials and worked goods, and
fertiliser. Sales to Libya also went up by 5.3%, mainly goods worked in cast iron/iron/steel,
mechanical machines and apparatus, ceramic products, cereal based prepared foods, and
paper/cardboard/worked goods. Inversely, exports to Morocco fell by 1.5%.
There was a lower level of purchases from all UMA countries, notably Libya (-42.8%) and
Algeria (-24.2%), following lower international prices for oil products, which were the main
category of imports from these two countries.
With Egypt, Tunisia’s main Arab trading partner in Africa aside from UMA countries, exports
were down by 30.1% and imports by 26.4% and the deficit was narrowed by 22.5% or
33.5 MTD to 115.5 MTD.
With the countries of sub-Saharan Africa, sales rose by 14.6%, while purchases fell by
15.3%. The traditionally surplus balance thus increased by 27% or 67.6 MTD to
318.3 MTD. It should be noted that the share of these countries in overall exports rose from
1.5% to 2.1%, while that of imports came at 0.4% vs. 0.3% in 2008. Progress in sales
concerned mainly Ethiopia, Senegal, Cameroon, the Congo, and Gabon. The drop in imports
involved essentially Cameroon and Uganda.




                                            142
3. TRADE WITH THE AMERICAS
The 25.7% drop in exports and the 12.8% drop in imports with the American continent
yielded 6.2% (83 MTD) decrease in the trade deficit, which came to 1,256.5 MTD. Sales to
this continent represented 2.6% of overall exports, while the share of imports in overall
purchases came to 6.8% vs. 2.9% and 6.7% respectively a year earlier.
As for trade with the United States, Tunisia’s leading trading partner in this part of the world,
exports fell by 32.9%, while imports rose by 12.1%, yielding a deficit that was 46.5%
(239.9 MTD) higher, posting 755.7 MTD.
Purchases of soybeans, mechanical and electrical machines and apparatus, transport
material, optical products and scientific apparatus recorded an increase, as opposed to a
drop in imports of cereal and vegetable oil.
Quadrupling of exports to Canada from 17.4 MTD in 2008 to 64.5 MTD in 2009 helped
reduce the trade deficit by 48.5% or 47.1 MTD to 50.1 MTD. Worth of note that the
substantial rise in exports was led by oil products.
Trade with Brazil went down by 42.2% for exports and by 28.3% for imports. The drop in
exports was due to lower sales of phosphate products, while the drop in imports involved
mainly vegetable oil, cereal, sugar and coffee.
As for trade with Argentina, Tunisia’s second leading trading partner in Latin America, the
considerable 56.2% drop in imports was caused for the most part by lower purchases of
corn, vegetable oil, and soy cakes. Exports also fell, by 61.2%.
4. TRADE WITH ASIA
Despite the 5.5% decrease in imports from Asian countries, this continent confirmed its
standing as Tunisia’s second most important supplier, with a 12.5% share in overall imports.
Exports to Asia posted a weak share in overall exports, down from 7.4% in 2008 to 5% in
2009, a drop of 44.8%. The trade deficit thus widened by 35.8% to 2,275.9 MTD,
corresponding to 35.5% of Tunisia’s overall deficit vs. 25.4% a year earlier.
With the Arab countries of Asia, the deficit narrowed considerably as exports rose slightly
by 1.8% and imports fell by a sizeable 41.9%, down from 457.8 MTD in 2008 to 167.9 MTD
in 2009. The high increase in sales to Syria, the United Arab Emirates, Lebanon and Qatar
more than offset the drop in exports to Saudi Arabia. This country accounted for more than
47% of the drop in imports from the Arab countries of Asia.
With Asian countries other than Arab, exports dropped sharply, down from 1,537.5 MTD in
2008 to 744 MTD in 2009, while imports rose by 3.5% to 2,852 MTD. The deficit rose
considerably, up from 1,218.6 MTD in 2008 to 2,108 MTD in 2009.
The drop in exports is closely linked to lower sales of phosphate products, which are the
main category of products exported to these countries. India and Iran were the markets most
concerned by this decrease.
The increase in imports, mainly from China and India, would have been higher if it had not
been for the drop in purchases, notably, by Indonesia and Iran.

                                              143
TUNISIAN TRADE BY GROUP OF COUNTRIES
                        Exports                                      Imports                           Balance
   Group of
                  In MTD      Share in %                      In MTD        Share in %                  In MTD
   Countries
               2008    2009 2008 2009                      2008    2009    2008 2009                 2008    2009
Europe               18,035.4 14,821.5    76.3    76.1    21,608.9     18,681.8    71.4      72.2   -3,573.5   -3,860.3
EU, of which :       17,028.1 14,367.2    72.0    73.8    17,331.9     16,237.0    57.3      62.7     -303.8   -1,869.8
 Euro Zone,          15,675.4 13,199.3    66.3    67.8    15,931.3     14,996.5    52.7      58.0     -255.9   -1,797.2
 of which :
 France               6,735.3 5,770.7     28.5    29.6     5,585.7      5,334.1    18.5      20.6    1,149.6      436.6
 Italy                4,883.9 4,095.1     20.7    21.0     5,213.4      4,184.0    17.2      16.2     -329.5      -88.9
 Germany              1,637.1 1,711.8      6.9     8.8     2,109.0      2,250.9     7.0       8.7     -471.9     -539.1
 Spain                1,157.6    656.2     4.9     3.4     1,168.3      1,166.9     3.9       4.5      -10.7     -510.7
 Belgium                526.1    430.7     2.2     2.2       545.4        515.6     1.8       2.0      -19.3      -84.9
 United Kingdom       1,099.4    925.5     4.7     4.8       560.1        459.3     1.9       1.8      539.3      466.2
 Sweden                  62.1     56.4     0.3     0.3       198.7        206.7     0.7       0.8     -136.6     -150.3
EFTA, of which :        566.1    197.8     2.4     1.0       209.2        248.3     0.7       1.0      356.9      -50.5
 Norway                   6.4     15.9     0.0     0.1        12.8         16.5     0.1       0.1       -6.4       -0.6
 Switzerland            557.9    179.7     2.4     0.9       195.6        230.1     0.6       0.9      362.3      -50.4
Other European
 countries,             441.2    256.5     1.9     1.3     4,067.8      2,196.5    13.4       8.5   -3,626.6   -1,940.0
of which : Russia        28.2     15.3     0.1     0.1     2,279.5        926.0     7.5       3.6   -2,251.3     -910.7
Turkey                  378.5    230.3     1.6     1.2       899.0        776.1     3.0       3.0     -520.5     -545.8
 Ukraine                 26.7      0.5     0.1     0.0       634.4        440.7     2.1       1.7     -607.7     -440.2
Africa, of which :    2,428.2 2,554.0     10.3    13.1     2,755.4      1,851.8     9.1       7.2     -327.2      702.2
Arab countries        2,073.5 2,147.6      8.8    11.0     2,651.4      1,763.7     8.8       6.8     -577.9      383.9
 of which :
 - UMA, of which :    1,879.7 2,035.2      8.0    10.4     2,323.1      1,520.6     7.7       5.9     -443.4      514.6
    .Algeria            499.3    608.2     2.1     3.1       890.0        674.5     2.9       2.6     -390.7      -66.3
    .Libya            1,065.2 1,121.2      4.5     5.8     1,319.2        754.4     4.4       2.9     -254.0      366.8
    .Morocco            286.5    282.2     1.2     1.4       109.9         88.8     0.4       0.3      176.6      193.4
 - Egypt                157.7    110.3     0.7     0.6       306.7        225.8     1.0       0.9     -149.0     -115.5
America                 680.0    505.3     2.9     2.6     2,019.5      1,761.8     6.7       6.8   -1,339.5   -1,256.5
NAFTA, of which :       420.3    344.9     1.8     1.8     1,080.7      1,192.5     3.6       4.6     -660.4     -847.6
 - USA                  395.3    265.3     1.7     1.4       911.1      1,021.0     3.0       3.9     -515.8     -755.7
 - Canada                17.4     64.5     0.1     0.3       114.6        114.6     0.4       0.4      -97.2      -50.1
Other American
countries               259.7    160.4     1.1     0.8       938.8        569.3     3.1       2.2     -679.1     -408.9
of which : Brazil       232.3    134.3     1.0     0.7       371.2        266.1     1.2       1.0     -138.9     -131.8
    Argentina            18.8      7.3     0.1     0.0       497.0        217.7     1.6       0.8     -478.2     -210.4
    Equator               0.0      0.0     0.0     0.0        10.6         35.8     0.0       0.1      -10.6      -35.8
Asia                  1,761.6    972.1     7.4     5.0     3,438.0      3,248.0    11.4      12.5   -1,676.4   -2,275.9
Arab countries,         224.1    228.1     0.9     1.2       681.9        396.0     2.3       1.5     -457.8     -167.9
 of which :
 - Gulf coop. count.    168.6    141.9     0.7     0.7         614.8     333.4      2.0       1.3     -446.2     -191.5
 of which :
   .Saudi Arabia         74.0     35.3     0.3     0.2       280.5        145.0     0.9       0.6     -206.5     -109.7
 - Iraq                   7.9      5.6     0.0     0.0         0.0          0.0     0.0       0.0        7.9        5.6
 - Syria                 12.9     38.7     0.1     0.2        15.1         13.6     0.0       0.1       -2.2       25.1
Other Asian count. 1,537.5       744.0     6.5     3.8     2,756.1      2,852.0     9.1      11.0   -1,218.6   -2,108.0
 of which :
 - China                 72.4     93.8    0.3      0.5     1,129.2      1,287.5     3.7       5.0   -1,056.8   -1,193.7
 - Japan                 89.9     73.4    0.4      0.4       399.9        320.2     1.3       1.2     -310.0     -246.8
 - India                728.3    321.2    3.1      1.6       268.2        301.4     0.9       1.2      460.1       19.8
 - Indonesia             11.8      9.0    0.0      0.0       135.2         81.4     0.4       0.3     -123.4      -72.4
 - Hong Kong             13.7     11.3    0.1      0.1        55.5         62.6     0.2       0.2      -41.8      -51.3
Other countries         731.8    616.3    3.1      3.2       419.4        334.2     1.4       1.3      312.4      282.1
     TOTAL          23,637.0 19,469.2    100.0   100.0    30,241.2     25,877.6   100.0     100.0   -6,604.2   -6,408.4
                                                                                  Source : National Statistics Institute




                                                         144
                                     VIII. EXTERNAL PAYMENTS
The general balance of payments in 2009 yielded a considerable surplus, amounting to
2,204 MTD vs. 2,053 MTD in 2008, despite the impact of the international financial crisis on
the real economy, illustrated by a significant drop in trade of goods and services and capital
flows around the world. This positive result was attributable to the lower deficit in the balance
of current payments and net capital inflows that remained at a high level, which helped to
more than cover the current deficit and to boost net assets in foreign currency that went up to
13,353 MTD at the end of 2009, the equivalent of 186 days of imports, compared to
11,656 MTD and 139 days at the end of 2008.
TRENDS IN THE MAIN BALANCES OF THE BALANCE OF PAYMENTS
                                                                                 (In MTD unless otherwise indicated)
                    Description                       2005          2006           2007         2008            2009
    A – Current payments                                -389          -824        -1,175        -2,109          -1,666
    Current deficit/GDP (%)                              0.9           1.8           2.4           3.8             2.8
      - Merchandise (FOB)                             -2,547        -3,345        -3,685        -4,941          -4,994
      - Services                                       2,374         2,450         2,699         3,257           3,409
      - Factor income                                   -377          -123          -419          -675            -393
      - Current transfers                                161           194           230           250             312
    B – Capital & financial transactions account       1,640         3,647         2,105         4,022           3,781
      - Capital transactions                             165           193           212            97             222
      - Direct investment                                925         4,312         1,941         3,205           2,060
      - Portfolio investment                              15            86            39           -49            -120
      - Other investments1                               535          -944           -87           769           1,619
    C – Adjustment operations (net flows)                -35           -50           -47           140              89
                   General balance                     1,216        2,773            883        2,053           2,204



                THE MAIN BALANCES ENTERING INTO THE BALANCE OF PAYMENTS


      4,500                                                2008
                                                                   2009
      3,500

      2,500                                        2007                                         2008     2009

      1,500                                                                            2007
        500

       -500

      -1,500        2007
                                  2009
      -2,500               2008
                     Current Payments        Capital and Financial Transaction             General Balance
                                                         Account



Aside from lower prices for traded commodities, which reduced both the value of exports and
imports, current payments were hard hit in 2009 by the impact of the international economic
and financial crisis on exports by certain sectors in the wake of lower foreign demand, for
example mechanical/electrical and textile/clothing/leather industries.
1
   This concerns financial transactions related to medium and long term borrowing-loan, short term assets and
liabilities as well as SDR allocations.
                                                      145
A set of conjunctural measures was adopted, meant to provide support to export companies
in these fields. This helped avoid an excessive drop in sales of manufactured goods (as
occurred in the first half of the year) and to get back in the last quarter to a positive trend that
will help mitigate high pressure on current payments.
Moreover, current payments profited from the sharp drop in quantity of imported foodstuffs,
thanks to a good cereals harvest and lower purchase of raw materials and semi-finished
products as well as energy products, in line with slowing economic activity.
The status of current payments was further helped by a higher surplus in the balance of
services and in particular a considerable narrowing of the deficit in factor income. The drop in
oil prices was an important factor in significantly reducing transfers in kind to remunerate the
foreign direct investment made by oil companies in Tunisia. The current deficit thus went
down by 21% from the 2008 figure, bringing it to a manageable level.
But the climate of instability that marked the international financial market influenced the
volume of foreign resources mobilised. Foreign investment flows attracted by Tunisia in
particular were down by 34.5%, a situation that concerned all beneficiary sectors except
manufacturing industries, which continued to attract a higher volume of investment, given its
many comparative advantages.
The surplus in capital and financial transactions decreased compared to the 2008 figure
while remaining at a high level due to notable improvement in net capital inflows from other
investments, despite the fact that the Administration did not seek funds on the international
financial market. The allocation in SDRs by the IMF to Tunisia worth some 496 MTD
(238.5 million SDRs) helped to significantly consolidate the balance in the balance of other
investments.
As for the parameters of foreign debt, the outstanding balance of medium and long term
foreign debt as a ratio of GNDI continued on the downturn in effect since 2006. By the end of
2009 it stood at 37.3%, while the debt service coefficient went up by 2.8 percentage points to
10.5%, following repayment by the Administration of a debenture loan (euro-bond) in the
amount of 225 million euros, the equivalent of 427 MTD.
A. CURRENT PAYMENTS
The balance of current transactions in 2009 yielded a deficit of 1,666 MTD, representing
2.8% of GDP vs. 2,109 MTD (3.8%) a year earlier. This drop was attributable to the 282 MTD
narrowing in the deficit of the balance of factor income which posted 393 MTD thanks to the
combined effect of lower expenditure for capital income and higher worker remittances. At
the same time, the surplus in the balance of services rose by 152 MTD, up from 3,257 MTD
in 2008 to 3,409 MTD in 2009.
CURRENT TRANSACTIONS BALANCE
         Description       2005                    2006         2007          2008         2009
 Receipts (In MTD)        21,159                  23,719       28,551        34,089       29,994
 Annual variation (%)       11.3                    12.1         20.4          19.5        -12.0
 Expenditure (In MTD)     21,548                  24,543       29,726        36,198       31,660
 Annual variation (%)       10.1                    13.9         21.1          21.8        -12.5
        Balance (In MTD)    -389                    -824       -1,175        -2,109       -1,666


                                                146
However, the deficit in the balance of trade (in terms of FOB-FOB), was widened by 53 MTD:
from 4,941 MTD in 2008 to 4,994 MTD in 2009.

                        GROWTH RATE : GOODS AND SERVICES EXPORTS AND GDP
        (In %)
   30
   25
   20
   15
   10
    5
    0
   -5
  -10
  -15
  -20
                 2001     2002   2003    2004         2005         2006        2007        2008        2009

                                   GDP             Goods and services exports


1. TRADE
Expressed in terms of FOB-CIF, the trade deficit narrowed by 195 MTD (3%) to post 6,409 MTD,
vs. 6,604 MTD in 2008. Still, the rate of coverage fell by 3 percentage points to 75.2%, following
the drop in exports at a faster pace than imports.
Trends in trade were marked in 2009 by lower commodity prices and fallout from the international
economic and financial crisis that led to reduction of exports by certain sectors as foreign
demand went down, of which notably the European Union countries that are Tunisia’s top trading
partners.
BALANCE OF TRADE
                 Description             2005             2006            2007            2008           2009
 Exports FOB (in MTD)                    13,794           15,558          19,410        23,637          19,469
 Annual variation (%)                      11.2             12.8            24.8           21.8           -17.6
 Imports CIF (in MTD)                    17,292           20,003          24,437        30,241          25,878
 Annual variation (%)                        6.8            15.7            22.2           23.7           -14.4
         Balance (In MTD)                -3,498           -4,445          -5,027        -6,604          -6,409
                                                                             Source : National Statistics Institute
Exports were down by 17.6% to 19,469 MTD, after increasing by 21.8% a year earlier,
affected by a drop in the value of sales of all products except that of the products turned out
by other manufacturing industries. In particular, exports by the mining/phosphates/phosphate
based-product sector fell by 50% and exports by the energy sector by 35.3% in 2009,
compared to respective increases of 129.5% and 30% in 2008, affected mainly by lower
prices for these goods, as reflected in a drop in the export price index, which fell by 53.9% for
the mining/phosphates/phosphate based-product sector and by 29.5% for the energy sector.
Exports by manufacturing industries also followed the same trends, posting a drop of 5.4%
after increasing by 8.8% in 2008. This was influenced by a 3.7% drop in sales by
mechanical/electrical industries and an 8.9% drop in sales by textile/clothing/leather industries,
compared to +18.3% and virtual stagnation respectively in 2008. Falling sales in these two
sectors over the first half of the year was however mitigated by considerable progress over the

                                                    147
last quarter of the year, thanks to measures taken to help exporting businesses in these fields.
This initiative took place along with early signs of recovery in demand in partner countries.
As of yearend 2009, 300 businesses had actually benefitted from the measures designed to
help in the current conditions.
After having increased by 23.7% in 2008, imports were down in 2009 by 14.4% to
25,878 MTD vs. 30,241 MTD a year earlier. This drop concerned in particular purchases by
the mining/phosphates/phosphate based-product sector (-69.6% vs. +253.6% in 2008), the
energy sector (-43.2% vs. +63.7%) and the agricultural/agrofood sector (-26.4% vs. +26.8%),
mainly because of the drop in prices for these products, with import price indexes down by
63%, 35.9% and 16.3% respectively in 2009. Purchases by mechanical/electrical industries
virtually stagnated (+0.1%) compared to an increase of 14.3% in 2008, while imports by other
manufacturing industries continued to go up at a rate of 3.2% vs. 11.8% a year earlier.
Analysis of trends in trade by group of products shows that narrowing of the trade deficit in
2009 was due mainly to recovery in the balance of food and the sizeable narrowing of the
deficit in the balance of energy. The deficit in the balance of raw materials and semi-finished
products narrowed too, while the deficit the balance of capital goods was greater than that of
2008. The surplus in the balance of consumer goods narrowed in the wake of lower sales by
the textile/clothing/leather sector.
TRENDS IN THE BALANCE OF TRADE BY CATEGORY OF PRODUCTS                                        (In MTD)
           Description             2005   2006     2007                         2008          2009
 Food                                         135        277        -425          -751           38
 Raw materials & semi-finished products    -1,762     -2,110      -2,828        -2,759       -2,614
 Capital goods                             -2,249     -2,450      -2,915        -3,162       -3,956
 Consumer goods                               888        679       1,005           902          275
 Energy                                      -510       -841         136          -834         -152
             Trade balance                 -3,498     -4,445      -5,027        -6,604       -6,409
                                                                  Source : National Statistics Institute

Contrary to the previous two years, the balance of food posted a surplus of 38 MTD, after a
record deficit of 751 MTD in 2008. This improvement was attributable to imports that
decreased at a faster pace than exports, bringing about a considerably better rate of
coverage, up from 71.1% to 102.4%.
Coming to 1,593 MTD, imported food products posted a drop of 38.7% (compared to
+27.4% in 2008), influenced by the combined effect of falling prices and lower quantities
purchased. More than 80% of this drop was attributable to the lower value of purchases of
cereal products, down from 1,481 MTD in 2008 to 630 MTD in 2009. There were decreases
in imported quantities of all kinds of cereals, notably hard wheat (-34.1%), soft wheat
(-27.9%) and barley (-87.1%), in the wake of higher national production (+112.6%) as well
as in import prices expressed in dinars, down by 35.9% for hard wheat, by 37.6% for soft
wheat, and by 36.5% for barley compared to 2008 figures. Imports of vegetable oil went
down by 53.6% and milk/dairy products by 44.2%, affected mainly by the drop in prices.
Potatoes on the other hand, contrary to other food products, posted an increase of 154.3%
because of a high increase in quantities purchased (+284.3%).



                                              148
Exports of food products went down by 11.8% to 1,631 MTD, compared to increases of
14.5% a year earlier. This was caused by a 29.7% drop in sales of olive oil, to reach
533 MTD, under the combined impact of a 16.2% decrease in quantities shipped and some
16% drop in average selling price.
The deficit in the balance of energy narrowed considerably, from 834 MTD in 2008 to
152 MTD in 2009, a drop of 682 MTD or 81.8%. This improvement was due to imports that
went down at a faster pace than exports, bringing about an 11.6 percentage point increase
in the rate of coverage to 94.6%.
Due to drops in both prices and quantities purchased, imports of energy products posted a
drop of 43.2% to 2,790 MTD vs. 4,914 MTD in 2008. This drop concerned in particular
refined products (-45.1%), crude oil (-41.2%) and natural gas (-38.1%), compared to
respective increases of 59.3%, 54.1% and 113.2% in 2008.
Exports of energy products fell by 35.3% to 2,638 MTD, after increasing by 30% to
4,080 MTD in 2008. This drop concerned mainly crude oil, sales of which dropped by 35% to
2,093 MTD (influenced solely by falling prices), while exported quantities rose by 2.7%.
At the same time, the deficit in the balance of raw materials and semi-finished products
narrowed, down from 2,759 MTD in 2008 to 2,614 MTD in 2009. But the rate of coverage fell
by 5.3 percentage points to 67.7%, influenced by a drop in exports at a faster pace than in
imports.
Exports of raw materials and semi-finished products fell by 26.8% to 5,468 MTD vs. 7,475 MTD
in 2008, decreasing mainly because of the 50% drop in sales by the mining/phos-
phates/phosphate based-product sector in the wake of lower value from sales of all
phosphate products. In effect, the increase in exported quantities of phosphoric acid
(+26.2%), DAP (+29.2%) and triple super phosphate (+15.1%) was not enough to offset the
drop in prices for these products, with an export price index that fell by 53.9% to 288.5%.
In rising to 8,082 MTD in 2009 (vs. 10,234 MTD the year before), imports of raw materials
and semi-finished products went down by 21% (vs. +30.2% in 2008). This drop was due
mainly to lower volume in purchases of phosphate products, which dropped from 1,735 MTD
in 2008 to 527 MTD in 2009, notably purchases of sulphur, which fell by 85.8%, in line with a
decrease of some 74% in average price. Similarly, imports of iron and steel as well as
ammoniac went down by 46.8% and 41.6% respectively, mainly because of lower prices.
The deficit in the balance of capital goods, on the other hand, widened by 794 MTD or
25.1% to 3,956 MTD (compared to 3,162 MTD in 2008), leading to a drop in the rate of
coverage that fell from 45.3% in 2008 to 39.9% in 2009.
In line with a drop in the industrial production index (-5.9% in 2009 vs. +4.7% in 2008),
exports by mechanical/electrical industries were down by 3.7%, vs. an increase of 18.3% in
2008, despite net recovery in sales by this sector over the last quarter of 2009. Still, the
share of this sector in overall exports rose by 4.4 percentage points to 30.8%, thus
reinforcing its standing as the country’s leading export sector.



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Imports of capital goods went up by 13.9% to 6,586 MTD compared to 5,784 MTD in 2008.
This took place in line with an increase in investment (+8.1%), mainly by businesses
operating in the communication and electricity sectors.
The balance of consumer goods continued to yield a surplus, but it was lower than in 2008,
down from 902 MTD in 2008 to 275 MTD in 2009. Consequently, the rate of coverage fell by
9.4 percentage points to 104%. The drop in exports (-6.7% vs. +3.6% in 2008) took place in
conjunction with a slight increase in imports (+1.8% vs. +5.8% in 2008).
These trends reflect mainly trends in the textile/clothing/leather sector whose exports,
reacting to lower foreign demand, fell at a faster pace than imports (8.9% and 7.4%
respectively), following virtual stagnation of trade in 2008. Timid recovery in exports by this
sector in the last quarter helped offset the drop in sales over the first half of the year so that
its share in overall exports remained at almost 30%.
Analysis of trends in trade by regime shows a narrowing of the trade deficit under the
general regime and an increase in the surplus under the offshore regime.
The trade balance under the general regime yielded a deficit which, unlike the previous
years, narrowed by 0.5% to reach 10,536 MTD, especially after the deficit in the balance of
energy went down, as did that of agriculture and agrofood industries. Still, the rate of
coverage fell by 9.3 percentage points to 41.9%, following a drop in exports at a faster pace
than that of imports (31.5% and 16.4% respectively), reaching 7,597 MTD and 18.132 MTD.
Under the off-shore regime, the traditional surplus in trade operations grew to 4,127 MTD
(vs. 3,986 MTD a year earlier), the 3.5% increase being attributable to the better figure for
the balance of mechanical/electrical industries and a sizeable narrowing of the deficit in the
balance of other manufacturing industries. The rate of coverage thus rose by 6.7 percentage
points to 153.3%. Exports under this regime went down less rapidly than imports (5.4% and
9.5%), posting 11,873 MTD and 7,746 MTD respectively.
2. SERVICES
The balance of services yielded a surplus in 2009 that grew at a faster pace to reach
3,409 MTD, up from 3,257 MTD in 2008, an increase of 4.7%.
BALANCE OF SERVICES
        Description                  2005          2006         2007         2008         2009
 Receipts (In MTD)                    5,217          5,717      6,306        7,409        7,425
 Annual variation (%)                  15.4            9.6       10.3         17.5           0.2
 Expenditure (In MTD)                 2,843          3,267      3,607        4,152        4,016
 Annual variation (%)                  14.4           14.9       10.4         15.1          -3.3
       Balance (In MTD)               2,374          2,450      2,699        3,257        3,409

The quasi-stagnation in service receipts which came at 7,425 MTD vs. 7,409 MTD was
attributable, mainly, to the combined effect of slower pace in tourist receipts and the drop in
transport receipts ; while receipts from other services continued to progress overall. Still, the
share of service receipts in current ones rose to 24.8%, up from 21.7% in 2008, an
improvement based on the considerable drop in export of goods, the share of which in
current receipts went down by 4.4 percentage points to 64.9% in 2009.

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Expenditure by the services sector was down by 3.3% to 4,016 MTD, mainly because of
drops in costs for transport and travel.
a. Transport
The balance of transport in 2009 yielded a deficit of 138 MTD, up from a surplus of 36 MTD a
year earlier. This deterioration was attributable, mainly, to the 20.1% decrease in receipts,
while expenditure dipped by 12.8%.
TRANSPORT BALANCE
          Description                  2005           2006        2007        2008         2009
 Receipts (In MTD)                      1,474         1,655       1,841        2,335       1,866
 Annual variation (%)                    29.4          12.3        11.2         26.8       -20.1
 Expenditure (In MTD)                   1,436         1,643       1,870        2,299       2,004
 Annual variation (%)                    15.4          14.4        13.8         22.9       -12.8
        Balance (In MTD)                   38            12         -29           36        -138

Receipts fell from 2,335 MTD in 2008 to 1,866 MTD in 2009, due mainly to lower receipts
from travel tickets and freight in the wake of weak performance in passenger traffic and trade
in goods.
Ticket sales receipts, the main component of transport inflows, dropped by 13.9% to
1,014 MTD, following an increase of 15.2% and 1,178 MTD a year earlier, in line with the
drop in non resident entries in 2009.
The national carrier Tunisair, the main Tunisian operator in air transport, suffered a 10.6%
drop in receipts, which came to 555 MTD in 2009 (compared to an increase of 16.7% in
2008). The reason for this downturn was the 7.2% drop in the number of passengers to
3,557,000, compared to a 6.1% increase a year earlier. Its market share thus fell by
0.8 percentage point to 32.9%.
Receipts from the sale of tickets at the private airline “Nouvelair” fell by 19.6%. Its market share
nonetheless went up in 2009 thanks to the synergy created by merger with “Karthago Airlines”.
Receipts from ticket sales at the Tunisian navigation company (CTN), the main operator in
maritime transport, was also down, affected by the adverse international context.
To boost activity in passenger transport, CTN increased its core resources in 2009. In an
effort to finance its investment and expand its fleet, it ordered a new car ferry that will start
service in 2012. It also launched new services in 2009 to motivate clients to travel on its car
ferries throughout the year, especially in low season. This has been done by offering
promotional fares for crossings and cruises.
Freight receipts, went down by 8.1% in 2009 to 147 MTD, marked by a decrease in export,
the transport of which is handled mainly by Tunisian companies such as Tunisair, CTN and
the Kerkennah transport company STK.
To stand up to competition and to support its freight operations, CTN expanded its fleet by
acquisition in early 2010 of two new freighters : the Amilcar and the Elyssa.




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Receipts from air freight went down in 2009, reflecting the adverse international conditions
that affected transport traffic worldwide. Receipts for the private companies Nouvelair and
Karthago Airlines came to some 196 MTD in 2009, down from 229 MTD the year before.
After enjoying an upward trend since 2002, receipts from gas royalties paid to the Tunisian
State for passage of the two transcontinental gas pipelines linking Algeria to Italy dropped by
33.5% to 434 MTD compared to 653 MTD in 2008. This decrease is attributable to a 12.5%
drop in the quantity of natural gas transported to Italy and consequently in the share going to
Tunisia, along with the lower price of gas on the international markets. Gas royalties paid in
kind fell by 42.2% in 2009 to 303 MTD, down from 524 MTD in 2008. Its share in total thus
fell from 80.2% to 69.8%. On the other hand, the portion of royalties paid in foreign currency
was up slightly by 1.6% to 131 MTD, with share increasing by 10.4 percentage points to
30.2%.
TRENDS IN GAS ROYALTIES
                                   In cash                               In kind                 Total
        Year
                          In MTD        In % of total           In MTD        In % of total     in MTD
        2005                149              44.0                190              56.0           339
        2006                 89              24.7                271              75.3           360
        2007                 65              15.8                346              84.2           411
        2008                129              19.8                524              80.2           653
        2009                131              30.2                303              69.8           434

Like receipts, expenditure for transport operations went down by 12.8% to 2,004 MTD,
compared to 2,299 MTD a year earlier. This drop involved all categories of transport.
Freight, the main component of expenditure by the transport sector, fell by 15% to
1,272 MTD compared to 1,497 MTD in 2008, in line with the lower level of imported goods.
Expenditure for transport tickets was down by 29.2% to 85 MTD compared to virtual stagnation
at 120 MTD in 2008.
For other categories of transport, expenditure particularly for aeronautical royalties and
chartering of planes dipped by 5.1% to 647 MTD, compared to 682 MTD in 2008, in line with
a drop in maritime and air traffic.
b. Travel
The surplus in the balance of travel grew further to 3,184 MTD, up from 3,074 MTD in 2008,
an increase of 3.6% thanks to the combined impact of higher receipts and lower expenditure.
BALANCE OF TRAVEL-RELATED TRANSACTIONS
            Description                 2005            2006           2007          2008        2009
Receipts (in MTD)                        2,779          3,028            3,300        3,639       3,744
Annual variation (%)                      13.2            9.0              9.0           10.3       2.9
Expenditure (in MTD)                      485            546               560           565       560
Annual variation (%)                      14.7           12.6              2.6            0.9      -0.9
       Balance (In MTD)                  2,294          2,482            2,740        3,074       3,184

Travel receipts went up by 2.9% to 3,744 MTD (vs. 10.3% and 3,639 MTD respectively in
2008), marked mainly by slower growth in flows generated by tourism, which rose by 2.4% to
3,472 MTD compared to 10.2% and 3,390 MTD in 2008, noting that non resident entries and

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bednights went down respectively by 2.1% and 10% in 2009, after rising by 4.2% and 1.5%
in 2008.
To boost tourism and meet the challenges caused by current conditions, a crisis unit was set
up at the ministry of tourism with the mandate to monitor markets in a continual manner,
especially European markets. Additional financing has been granted to increase initiatives to
promote Tunisia as a tourist destination, in cooperation with the main tour operators based in
partner countries.
Furthermore, authorities continued to work on diversifying tourism options in Tunisia, with a
view to keeping activity going throughout the year and improving quality by means of a hotel
upgrading programme focusing mainly on intangible issues and the quality of service at
these establishments.
TRENDS IN THE MAIN INDICATORS OF TOURISM
    Description         Units     2005              2006       2007       2008       2009
Tourist receipts              MTD        2,611      2,825     3,077       3,390       3,472
Annual variation               %          14.0        8.2       8.9        10.2         2.4
                         In thousands
Non resident bednights
                           bednights    33,587     34,086    34,546      35,049      31,557
Annual variation               %           9.5         1.5       1.3        1.5       -10.0
                         In thousands
Non resident entries
                            persons      6,378      6,549     6,762       7,049        6,901
Annual variation               %           6.3        2.7        3.2         4.2         -2.1
                                                                        Sources : BCT and ONTT

Despite the 8.8% drop in European tourist entries (after an increase of 1.5% in 2008), this
market remained the main source of tourists, with a 54.2% share in overall non resident
entries, down from 58.3% in 2008. Corresponding bednights also went down by 10.6% to
represent 92.4% of non resident bednights, compared to +1.3% increase and a 93% share
in 2008. Nevertheless, tourist receipts from this part of the world went up by 0.5% to
2,834 MTD representing 81.6% of overall tourist receipts compared to 2,821 MTD and 83.2%
a year earlier.
Entries for French and German tourists, Tunisia’s leading European clients, went down by
3.6% and 7.3% respectively in 2009, compared to increases of 4.5% and 1.6% in 2008. The
related bednights posted the same trend with respective drops of 7.7% and 7.3% compared
to 7% and 1.4% increases in 2008. Flows from these two countries, however, went up to
902 MTD for France and 553 MTD for Germany, recording thus respective progress rates of
3% and 2% compared to 2008.
With regard to Italy and Poland, indicators for tourism posted respective drops in entries and
bednights for the Italian : down by 13.7% and 20.4% and the Polish : down by 15.5% and
13.7%. Concurrently, tourist receipts from these two countries regressed respectively from
278 MTD and 108 MTD in 2008 to 256 MTD and 106 MTD in 2009.
This was also the case for tourist receipts from Russia (down from 109 MTD in 2008 to
98 MTD in 2009), Spain (down from 71 MTD to 69 MTD) and the Czech Republic (down from
77 MTD to 61 MTD).



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There was on the other hand recovery in the British market in 2009. Entries went up by 8.1%
and bednights by 8%, compared to respective drops of 18.5% and 14.9% in 2008. This
generated a 15.2% increase to 258 MTD.
The Maghreb market generated some 523 MTD in receipts vs. 455 MTD in 2008, an
increase of 14.9% vs. 21.3% the year before. Entries of tourists from the Maghreb rose by
7.9% vs. 8.4% a year earlier, due to the 12.9% greater number of Libyans who visited
Tunisia in 2009, thus remaining in first place in terms of entries of non residents, with almost
two million entries, 28.9% of total vs. 25.1% in 2008. Algerian tourist flows, on the other
hand, dropped by 0.7%, vs. 1.3% a year earlier. Bednights for tourists from the Maghreb
went up by 8.3 % to represent 3.9% of overall non resident bednights, a fairly low figure
because of the low rate of hotel stays by tourists from the Maghreb.
Other receipts from travel transactions increased for the most part, up from 249 MTD in 2008
to 273 MTD in 2009.
In line with the 13.6% increase in the number of foreign patients to 142,000 in 2009, receipts
from medical care rose by 31.8% to 112 MTD, compared to 26.9% and 85 MTD a year
earlier. These patients come mainly from the Maghreb and Europe, with respective shares of
70% and 18% in the overall number of foreign patients.
As for studies and internships, receipts rose by 7.1% to 30 MTD (vs. 7.7% and 28 MTD in
2008), in line with the higher number of foreign students pursuing their education in Tunisia,
especially at private university-level schools. There were more than 3,500 such students.
Business travel receipts went up from 68 MTD in 2008 to 76 MTD in 2009.
Expenditure by the travel sector fell by 0.9% to 560 MTD (compared to +0.9% and 565 MTD
in 2008) since travel for the omra and the pilgrimage was cancelled in the second half of
2009, amounting to 78 MTD in 2008. This preventive measure was taken as the swine flu
epidemic spread to a number of countries around the world.
Expenditure by Tunisians for their tourist stays abroad posted 13.6% increase in 2009 to
368 MTD, compared to 324 MTD a year earlier. The share of this expenditure in overall
travel expenditure thus went up from 57.3% in 2008 to 65.7% in 2009. The further increase
granted at the end of 2009 put the tourist allocation up from 4,000 to 6,000 Tunisian dinars1,
with children having the right to half of this amount. But this had only a slight impact on
expenditure for this category of travel.
In the same way, expenditure for studies and internships went up by 14.3%, from 84 MTD in
2008 to 96 MTD in 2009 in line with the increase in the allowance to cover the cost of living
expenses for studies abroad2.
Expenditure for business and official travel, on the other hand, dropped by 7.4% to 63 MTD,
vs. 68 MTD a year earlier, despite the increase decided in early 2009 that raised the annual
ceiling in 2009 for «export business travel» by 200,000 dinars : from 300,000 to 500,000 dinars3.
Expenditure for medical care continued to post a low 17 MTD, up from 11 MTD in 2008.

1
  Cf. BCT circular to Authorised Intermediaries n°2009-21 of 13 November 2009.
2
  Cf. BCT circulars to Authorised Intermediaries n°2009-22 and n°2009-23 of 18 November 2009.
3
  Cf. BCT circular to Authorised Intermediaries n°2009-06 of 9 February 2009.
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c. Government transactions
The balance of government transactions in 2009 yielded a surplus that rose significantly from
49 MTD in 2008 to 130 MTD. This increase was based on receipts growing at a faster pace
than that of expenditure : 55.1% and 24.4% respectively vs. 15.4% and -2.2% in 2008.
BALANCE OF GOVERNMENT TRANSACTIONS
        Description        2005                     2006      2007         2008        2009
 Receipts (in MTD)                     156           177       195           225         349
 Annual variation (%)                 13.9          13.5      10.2          15.4        55.1
 Expenditure (in MTD)                  151           155       180           176         219
 Annual variation (%)                  4.1           2.6      16.1          -2.2        24.4
     Balance (In MTD)                    5            22        15            49         130

Receipts, made up essentially of funds collected by foreign diplomatic missions and the
offices of international institutions in Tunisia, came to 349 MTD, up from 225 MTD in 2008.
Expenditure by Tunisian diplomatic missions and other governmental offices abroad also
recorded a higher figure, up from 176 MTD in 2008 to 219 MTD.
d. Other services
The balance of other services yielded a surplus of 233 MTD in 2009 compared to 98 MTD a
year earlier. This consolidation was due to the 21.1% increase in receipts, while expenditure
grew at a less sustained pace (10.8%).
BALANCE OF TRANSACTIONS RELATED TO OTHER SERVICES
       Description         2005      2006      2007                       2008         2009
 Receipts (in MTD)                    807            856       970        1,210        1,465
 Annual variation (%)                 2.0            6.1      13.3         24.7         21.1
 Expenditure (in MTD)                 770            922       997        1,112        1,232
 Annual variation (%)                14.2           19.7       8.1         11.5         10.8
    Balance (In MTD)                   37            -66       -27           98          233

The main component of receipts from other services, funds collected for large scale works
and technical services continued to grow at a sustained pace of 40.6% to 516 MTD,
compared to 48.6% in 2008. This involved in particular counterpart receipts from services
provided abroad by Tunisians in the form of subcontracting and processing as well as
technical assistance and expertise.
Under the influence of the lower level of exports of goods, receipts from commercial costs and
international trading however went down slightly to 222 MTD, compared to 224 MTD in 2008.
Receipts from financial services (made up mainly of banking fees and commissions) went down
by 22.6% to 82 MTD, compared to 106 MTD in 2008, a drop that was caused by lower volume in
transactions abroad.
Receipts from communication services and from computer/information services continued to
grow in 2009, rising to 307 MTD and 55 MTD vs. 204 MTD and 44 MTD respectively in 2008.
The greater volume of flows thus received in fact reflects the comparative advantages
offered by Tunisia in the field of ICT, notably in terms of human and logistic resources as well
as the ongoing effort made by the State to support the services sector with high added value,

                                              155
through modernisation of ICT infrastructure and introduction of a legal and institutional
framework that favours investment, research and innovation in this area.
Prospects for the sector are very promising, thanks in particular to expansion of the El
Ghazela technopole and establishment of a network of cyberparks in eight inland regions of
the country. These plans should provide new opportunities to set up internationally renowned
companies. They will also allow for better positioning of Tunisia as an exceptional destination
for foreign investors and an attractive option for ICT off shoring services. In this framework, a
number of leading international firms specialised in ICTs set up business in Tunisia to
facilitate their activities on foreign markets. This was the case for Hewlett Packard (HP),
which will provide services to Europe; and SISCO, which will export its know-how to
neighbouring countries. The ERICSSON group, world leader in the field of telecommunication
technologies, also opted to make Tunisia a regional skills centre for North Africa.
These efforts helped Tunisia rank 39th out of 133 countries in the world in ICTs in the Davos
Economic Forum’s 2009/2010 report, first in Africa in terms of technological aptitude,
accessibility and regulations and 6th in the world in terms of policy that promotes new
technologies.
Receipts from insurance premiums and indemnities increased by 48.1% to 77 MTD while
those relating to office costs transferred by non resident companies to their branches and
agencies in Tunisia almost stagnated at 120 MTD.
Flows received for personal and cultural services rose by 2 MTD to 9 MTD while those
relating to royalties and licensing rights went down by 8.1% to 34 MTD.
Expenditure for other services went up by 10.8% to 1,232 MTD in 2009 vs. 11.5% and
1,112 MTD a year earlier.
Dominant in the total of these expenses, payments for large scale works and technical
services went up from 406 MTD in 2008 to 457 MTD in 2009. This increase was due mainly
to work to carry out major infrastructure initiatives. Expenditure related to insurance premium
and indemnities posted also an increase, up by 20.8% to 285 MTD.
On the other hand, in line with the lower volume of transactions abroad, expenditure for
commercial costs and international trading, and financial services dropped by 4.8% and 1.1%
respectively to 138 MTD and 89 MTD in 2009.
Expenditure related to communication services and those linked to computer/information
services recorded respective increases of 36.6% and 16% to 56 MTD and 29 MTD in 2009.
Involving lower amounts, expenditure for royalties and licensing rights, personal and cultural
services, and office costs rose to 19 MTD, 15 MTD and 19 MTD respectively in 2009, up
from 15 MTD, 13 MTD and 17 MTD in 2008.
3. FACTOR INCOME
The balance of factor income yielded a deficit that narrowed by 282 MTD to 393 MTD in
2009. This trend was attributable to a drop in expenditure at a faster pace than the drop in
receipts.


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BALANCE OF FACTOR INCOME
        Description                 2005          2006      2007        2008        2009
 Receipts (in MTD)                  1,961         2,223     2,574       2,768       2,760
 Annual variation (%)                 1.9          13.4      15.8         7.5         -0.3
 Expenditure (in MTD)               2,338         2,346     2,993       3,443       3,153
 Annual variation (%)                31.8           0.3      27.6        15.0         -8.4
        Balance (In MTD)             -377          -123      -419        -675        -393

At 2,760 MTD in 2009 vs. 2,768 MTD in 2008, receipts from factor income posted a drop of
0.3% vs. +7.5% a year earlier. The higher value of remittances in 2009 by Tunisians working
abroad was not enough to offset the drop in flows generated by proceeds from investment of
assets in foreign currency because of the drop in interest rates on the main foreign
currencies.
Expenditure for factor income was down by 8.4% to 3,153 MTD, vs. 3,443 MTD in 2008. This
drop was marked by lower expenditure for capital income in the form of transfers to
remunerate foreign investment while payment of interest on medium and long term debt
progressed slightly.
a. Worker remittances
The flow of worker remittances went up but at a slower pace than the year before, evolving at
a rate of 8.9% vs. 10.8% in 2008, from 2,436 MTD in 2008 to 2,653 MTD in 2009. Despite
such slower growth, the result was positive even in the context of international economic and
financial crisis that in other countries had a strong impact on such remittances by their
nationals abroad. The set of measures adopted, notably greater flexibility in regulations
governing foreign exchange as well as the customs, tax and financial incentives available to
Tunisians abroad contributed to maintaining these transfers at a high or even higher level,
despite the impact of the crisis.
Analysis of worker remittance mode of transfer shows an increase in transfers both in foreign
currency (9.1%) and in kind (8.3%), to 2,104 MTD and 549 MTD in 2009 vs. 1,929 MTD and
507 MTD a year earlier.
WORKER REMITTANCES BY MODE OF TRANSFER
                     Total             Cash input                        In kind input
    Year                   Annual             In % of                               In % of
               MTD                   MTD                                MTD
                       variation (%)           total                                 total
      2005          1,807           1.3        1,391        77.0         416         23.0
      2006          2,010          11.2        1,537        76.5         473         23.5
      2007          2,199           9.4        1,681        76.4         518         23.6
      2008          2,436          10.8        1,929        79.2         507         20.8
      2009          2,653           8.9        2,104        79.3         549         20.7

Breakdown of remittances sent back home by Tunisians resident abroad by country of origin
shows that 87.6% of inputs came from European countries, for transfers amounting to some
2,323 MTD vs. 2,150 MTD in 2008, given the large number of Tunisians in Europe. Indeed it
is estimated that there were some 911,000 living in Europe as of the end of 2009,
representing 82.8% of all Tunisians living abroad.



                                            157
Remittances by the 599,000 Tunisians living in France (54.5% of all expatriate Tunisians)
increased by 8.4% to 1,271 MTD, the equivalent of 47.9% of all such remittances.
Money sent home by the 86,000 Tunisians living in Germany and the 153,000 living in Italy
went up by 8.3% and 5% respectively to 398 MTD and 357 MTD in 2009, representing 15%
and 13.5% of these inputs.
Remittances by Tunisians living in Arab countries rose by 16.4% to 262 MTD, representing
9.9% of total. These were mainly flows from Gulf and UMA countries, for amounts of
194 MTD and 64 MTD in 2009 compared to 160 MTD and 60 MTD in 2008.
b. Capital income
The balance of capital income yielded a deficit of 3,028 MTD in 2009 (vs. 3,091 MTD a year
earlier), a drop of 63 MTD or 2%, due mainly to the 8.4% drop in expenditure.
BALANCE OF CAPITAL INCOME
        Description                  2005          2006      2007        2008        2009
Receipts (in MTD)                      154            213      376         332          108
Annual variation (%)                   8.5           38.3     76.5       -11.7        -67.5
Expenditure (in MTD)                 2,318          2,324    2,974       3,423        3,136
Annual variation (%)                  31.9            0.3     28.0        15.1          -8.4
     Balance (In MTD)               -2,164         -2,111   -2,598      -3,091       -3,028

The value of receipts, which remained largely below that of expenditure, fell by 67.5% to
108 MTD, compared to 332 MTD a year earlier. This drop concerned mainly interest on
investment in foreign currency (the main component of capital income receipts) which posted
92 MTD vs. 317 MTD in 2008, despite the higher level of assets in foreign currency in 2009.
Lower rates of remuneration and commitment to ensuring safe investment in a context of
crisis and market instability greatly affected these flows.
Expenditure for capital income dipped by 8.4% to 3,136 MTD in 2009. Dominant in transfers
of capital income with a 68.4% share in total, outlays to remunerate foreign direct investment
fell by 11.1% to 2,145 MTD compared to 2,412 MTD a year earlier. This was due mainly
to lower transfers by companies working in the energy sector, which fell by 20.2% to
1,460 MTD vs. 1,830 MTD a year earlier, in line with the drop in oil prices. This greatly
reduced transfers in kind by these companies.
On the other hand, income from direct investment transferred by companies working in other
sectors (notably manufacturing industries and telecommunications) went up by 14.9% to
685 MTD. The upward trend for such transfers over the past few years reflects the high influx
of investment going to these sectors over this period.
Interest on medium and long term debt accounted for 27.8% of overall capital income in
2009, up by 1.5% to 872 MTD. This increase concerned interest on medium and long term
debt paid by the Administration which went up from 573 MTD to 610 MTD, while such
interest paid by companies went down by 8.4% to 262 MTD.
Breakdown of expenditure for interest on medium and long term debt by type of cooperation
shows that interest paid to the international financial market increased from 313 MTD in 2008


                                             158
to 348 MTD in 2009, while those going to international institutions and in the framework of
bilateral cooperation fell by 2.8% and 6.9% respectively to 348 MTD and 176 MTD.
4. CURRENT TRANSFERS
In rising to 312 MTD in 2009, the surplus in the balance of current transfers grew by 24.8%
compared to the 2008 figure. This improvement was due to the 23.6% increase in receipts,
while expenditure which continued to involve just a low amount progressed at a less
sustained pace.
BALANCE OF CURRENT TRANSFERS
        Description         2005                   2006      2007        2008        2009
 Receipts (in MTD)                    187           221       261          275         340
 Annual variation (%)                13.3          18.2      18.1          5.4        23.6
 Expenditure (in MTD)                  26            27        31           25          28
 Annual variation (%)                18.2           3.8      14.8        -19.4        12.0
        Balance (In MTD)              161           194       230          250         312

Receipts relating to current transfers went up at a brisk pace (23.6%) compared to that of the
previous year to reach 340 MTD compared to 275 MTD in 2008.
In amounting to 144 MTD, funds going to the private sector rose by 5.9% over the 2008
figure. This concerns fellowships, grants in kind, and technical assistance to associations
and nongovernmental organisations. Transfers to the public sector were made up mostly of
taxes and levies, rising from 139 MTD in 2008 to 197 MTD in 2009.
Expenditure for current transfers came to 28 MTD, up from 25 MTD in 2008, involving for the
most part payments made by Tunisian individuals to foreign consular offices in Tunisia.
B. CAPITAL AND FINANCIAL TRANSACTIONS
After having increased sharply in 2008, the surplus in the balance of capital and financial
transactions narrowed by 6% or 241 MTD in 2009 to 3,781 MTD.
This drop was due to the lower surplus in the balance of foreign investments, which posted
1,940 MTD vs. 3,156 MTD in 2008, a year marked by a major influx of capital in the form of
FDI. On the other hand, the surplus balance of other investment improved smartly in the
wake of the recovery in the balance of medium and long term loan capital, yielding a surplus
of 459 MTD compared to a 4 MTD deficit in 2008, and the release in 2009 of allocations in
SDRs by the IMF to Tunisia for an amount of 496 MTD. The balance of capital transactions
continued to yield a positive balance that was more than double the 2008 figure, posting
222 MTD.
BALANCE OF CAPITAL AND FINANCIAL TRANSACTIONS
        Description           2005     2006                  2007        2008        2009
 Receipts (in MTD)                   3,668         6,811      5,043       6,252       6,497
 Annual variation (%)                -11.4          85.7      -26.0        24.0         3.9
 Expenditure (in MTD)                2,028         3,164      2,938       2,230       2,716
 Annual variation (%)                -13.2          56.0        -7.1      -24.1        21.8
        Balance (In MTD)             1,640         3,647      2,105       4,022       3,781




                                             159
1. CAPITAL TRANSACTIONS
The surplus in the balance of capital transactions went up sharply in 2009 to 222 MTD (from
97 MTD in 2008), in line with a notable increase in receipts that rose from 101 MTD in 2008
to 227 MTD in 2009, while expenditure continued to involve low amounts : 5 MTD in 2009
vs. 4 MTD in 2008.
The higher level of such receipts was marked by a strong increase in grants made by the
European Union, up from 67 MTD in 2008 to 134 MTD in 2009. These funds were meant
mainly to finance projects in the framework of the programme to support integration
(45 MTD), the vocational training sectoral programme (21 MTD), and the programme to
support secondary education (17 MTD). Besides, Tunisia in 2009 received 64 MTD in grants
from Saudi Arabia and 9 MTD from China.
BALANCE OF CAPITAL TRANSACTIONS
        Description         2005                                 2006            2007            2008             2009
    Receipts (in MTD)                             167              199             215              101             227
    Annual variation (%)                         18.4             19.2              8.0           -53.0           124.8
    Expenditure (in MTD)                            2                6                3               4               5
    Annual variation (%)                        -71.4            200.0            -50.0            33.3            25.0
        Balance (In MTD)                          165              193             212               97             222

2. FOREIGN INVESTMENT (DIRECT AND PORTFOLIO INVESTMENT)
The balance of foreign investment yielded a surplus of 1,940 MTD in 2009, down from
3,156 MTD in 2008. This drop was the result of the combined effect of the lower surplus in
the balance of direct investment and widening of the deficit in the balance of portfolio
investment.
BALANCE OF FOREIGN INVESTMENT1
        Description         2005                                 2006            2007            2008             2009
    Receipts (in MTD)                            1,091           4,565            2,162           3,602            2,366
    Annual variation (%)                          26.6           318.4            -52.6            66.6            -34.3
    Expenditure (in MTD)                           151             166              182             446              426
    Annual variation (%)                          58.9             9.9              9.6           145.1              -4.5
          Balance (In MTD)                         940           4,399            1,980           3,156            1,940

(i) Foreign Direct investment (FDI)
The surplus balance in the balance of foreign direct investment went down in 2009 to
2,060 MTD (from 3,205 MTD in 2008), a trend attributable to the lower volume of inflows in
this form, while expenditure in this category went up.
BALANCE OF DIRECT INVESTMENT
        Description          2005                                2006            2007            2008             2009
    Receipts (in MTD)                            1,019           4,406            2,075           3,404            2,288
    Annual variation (%)                          27.5           332.4            -52.9            64.0            -32.8
    Expenditure (in MTD)                            94              94              134             199              228
    Annual variation (%)                          51.6             0.0             42.6            48.5             14.6
           Balance (In MTD)                        925           4,312            1,941           3,205            2,060




1
    Statistical data presented in the tables include both Tunisia’s assets and liabilities, unless otherwise indicated.
                                                             160
Foreign direct investment attracted by Tunisia (liabilities) went down by 33% in 2009 to
2,279 MTD (compared to 3,399 MTD in 2008), representing 3.9% and 6.1% respectively in
gross domestic product. Nevertheless, this level remained quite high because of the absence
of sizeable sales such as those that took place in 2008, given the adverse international
context that greatly reduced corporate profits from direct investment and brought about a
tightening in international liquidity.
Direct investment flows mobilised in 2009 helped cover the current deficit and contributed to
financing of economic activity with a 35.2% share in overall foreign capital inflows.
Aside from its positive impact on the balance of the external sector, this form of financing
helped create 15,138 jobs in 2009 (exclusive of the sector of energy), of which almost
13,000 were in the industrial sector. There were some 3,069 foreign direct investment
companies in Tunisia at end 2009.
Breakdown of foreign direct investment flows by beneficiary sector was marked in 2009 by a
sharp decrease in flows to the energy sector and to the services sector that hit record levels
in 2008. Foreign direct investment in manufacturing industries, on the other hand, went up in
2009 despite fallout from the international financial crisis and tougher competition from other
countries particularly Asian and eastern Europe countries, which shows how attractive and
competitive Tunisia is. FDI in agriculture continued to involve fairly low amounts.
RECEIPTS FROM DIRECT INVESTMENT BY BENEFICIARY SECTOR (Liabilities)                    (In MTD)
        Description         2005      2006       2007        2008                      2009
 Energy                              386          940        1,359        1,934        1,234
 Tourism and real estate              17           18           72          199           85
 Manufacturing industries            375          347          486          642          772
 Financial sector                    120           22            0          371            0
 Telecommunications                   99        3,056           80           40          154
 Other                                19           20           74          213           34
                Total              1,016        4,403        2,071        3,399        2,279

Investment in the energy sector went down by 36.2% in 2009 to 1,234 MTD, vs. 1,934 MTD in
2008. Consequently, their share in overall direct investment regressed from 56.9% in 2008 to
54.1% in 2009. The drop in flows to this sector was attributable to completion of a number of
projects that generated a high level of flows in recent years. Investment by British Gas, one of
the leading investors in Tunisia’s hydrocarbon sector, decreased considerably in 2009. This
drop was due to completion of work that began in 2007 and start up of production in 2009 at
the Hasdrubal gas field, as well as to the drop in investment for development of the Miskar
field, which had recorded a substantial increase in 2008.
Still, the impact of lower investment by this company on the energy sector was mitigated by
the higher level of investment in 2009 by the Italian company ENI-Tunisia, which intends to
expand its operations in Tunisia by increasing the capacity of Gazoducs Transcontinentaux
to transport Algerian gas to Italy.
Lower FDI in hydrocarbons concerned both research & development and exploration,
amounting to respective amounts of 962 MTD and 272 MTD in 2009 vs. 1,466 MTD and
468 MTD in 2008.


                                              161
Investment in the services sector went down by 68.2% in 2009 to 256 MTD vs. 804 MTD in
2008, a year marked by high levels of inflows to the finance, tourism & real estate, and
transport sectors. In particular, the financial sector did not get any FDI flows in the form of
acquisition of shares in 2009 such as those enjoyed in 2008 for a total of 371 MTD of which
150 MTD (share going to the State) for sale of 60% of capital shares in the Tuniso-Kuwaiti
Bank to the French group Caisse d’Epargne and 132 MTD for sale of 35% of capital shares
in the Tunisian insurance and reinsurance company STAR to the French group GROUPAMA.
There were no foreign direct investment flows to the transport sector either in 2009, following the
61 MTD received in 2007 and 189 MTD in 2008 from the Turkish holding company TAV Airport
participation in paying in of capital and the capital increase at TAV-Tunisia, the company in
charge of building and running the Enfidha Airport.
Investment in tourism and real estate came to 85 MTD in 2009, down from 199 MTD in 2008,
which was a year marked by sale of shares in two Karthago hotels to the Libyan Laico company
for 131 MTD.
For 2009, foreign direct investment flows to this sector involved mainly ongoing financing of the
Tunis Sport City initiative in the amount of 36 MTD and deposit of the first portion of financing to
set up the Tunis Financial Harbor financial centre in the amount of 34 MTD. The former initiative
involves a golf course and setting up of sporting academies and infrastructure and the latter will
help to build an international business centre, banks, insurance companies, residential, sporting
and leisure complexes as well as an international training complex in the field of business.
FDI to other services, on the other hand, rose from 45 MTD in 2008 to 171 MTD in 2009.
These investments were meant mainly for the telecommunications sector, which received
154 MTD in 2009, of which 92 MTD were from attribution of a landline and mobile phone
license to the Divona/Orange France Télécom group. Foreign direct investment to finance
expansion and development operations undertaken by Tunisie Télécom and Tunisiana
operators came to 58 MTD in 2009. The remaining amount involved the sector of
international trade (12 MTD) and computer services, consulting and studies (5 MTD).
Foreign direct investment in manufacturing industries went up by 20.2% in 2009 to 772 MTD,
compared to 642 MTD in 2008. The share of investment in this sector in overall direct
investment thus went up by 15 percentage points over the 2008 figure to 33.9%. This
increase concerned most of the sub sectors of manufacturing industries.
Flows to the mechanical/electrical industries sector and to textiles/clothing in effect virtually
doubled from 102 MTD and 50 MTD respectively in 2008 to 209 MTD and 99 MTD in 2009.
Foreign direct investment to chemical and rubber industries continued to rise in 2009, up to
258 MTD vs. 216 MTD in 2008, a development attributable on the one hand to ongoing
implementation of the GPL initiative by British Gas in the amount of 144 MTD and on the other
hand mobilisation of 67 MTD from Indian investors in partnership with the chemical group to
implement the TIFERT initiative for manufacture of phosphoric acid.
FDI to the plastics and agrofood industries also went up in 2009 to 56 MTD and 26 MTD
respectively, compared to 16 MTD and 15 MTD in 2008.


                                                162
On the other hand, foreign direct investment to leather/footwear industries remained at prac-
tically the same level as the previous year (34 MTD), while flows to the building materials sector
went down from 105 MTD in 2008 to 72 MTD in 2009. This amount covers mainly investment by
the Spanish company “cemolins Internacional SL” in SOTACIB in the amount of 29 MTD.
For other branches of activity in the manufacturing industries sector, FDI flows went down
significantly, from 105 MTD in 2008 to 18 MTD in 2009.
Investment in the agricultural/fishing sector went down slightly in 2009 to 17 MTD, vs. 20 MTD
in 2008.
FDI outlays rose to 228 MTD, up from 199 MTD in 2008. This increase was due to the higher
level of investment by Tunisians resident abroad, up from 52 MTD in 2008 to 104 MTD in
2009, in line with raising of the threshold for investment by Tunisians abroad 1. Almost 42% of
these investments (44 MTD) were made in Algeria. The rest involved France (28 MTD),
Morocco (13 MTD) and Libya (12 MTD). Investment by Tunisians abroad was mainly in
services (86 MTD) and industry (16 MTD).
At the same time, disengagements in the form of repatriated materials by foreign oil
companies went up from 93 MTD in 2008 to 106 MTD in 2009, keeping in mind that
equipment imported by these companies used in oil exploration and drilling over the past few
years posted a significant increase, in line with rising FDI to this sector. Disengagement of
non residents following sale of shares in Tunisian companies came to 18 MTD, compared to
54 MTD a year earlier.
(ii) Portfolio investment
For the second straight year, the balance of portfolio investment yielded a deficit that went up
to 120 MTD vs. 49 MTD in 2008. This result was due to the drop in receipts which was
greater than the drop in expenditure.
BALANCE OF PORTFOLIO INVESTMENT
        Description          2005                             2006           2007    2008    2009
    Receipts (in MTD)                             72            159            87     198       78
    Annual variation (%)                        14.3          120.8          -45.3   127.6   -60.6
    Expenditure (in MTD)                          57             73            48     247      198
    Annual variation (%)                        72.7           28.1          -34.2   414.6   -19.8
          Balance (In MTD)                        15             86            39      -49    -120

Receipts recorded a sharp drop in 2009 to 78 MTD compared to 198 MTD in 2008, a year
when acquisition of corporate shares by non residents on the Tunis stock market recorded
an exceptional increase, in line with the sale of a portion of stock in the ARTES company (in
the amount of 74 MTD) and non resident acquisition of 50 MTD in shares when the stock
market first posted PGH (the Poulina group Holding).
Expenditure went down by 19.8% in 2009 to 198 MTD. This was mainly sale of shares by
non residents on the Tunis stock market as they sought to convert their holdings to liquidity.
These funds were amplified by the 48.4% increase in the TUNINDEX.



1
    Cf. BCT circular to Authorised Intermediaries n°2009-09 of 4 May 2009.
                                                        163
3. OTHER INVESTMENT
The balance of other investment posted a surplus of 1,619 MTD in 2009 compared to
769 MTD in 2008.
            Description              2005           2006       2007             2008         2009
 Receipts (in MTD                   2,410            2,047     2,665            2,549         3,904
 Annual variation (in %)            -23.2            -15.1      30.2              -4.4         53.2
 Expenditure (in MTD)               1,875            2,991     2,752            1,780         2,285
 Annual variation (in %)            -11.1             59.4       -8.0           -35.3          28.4
 Balance (In MTD)                     535             -944        -87             769         1,619

This improvement, from one year to the next, was attributable mainly to IMF SDR allocations
to Tunisia in the amount of 238.5 million SDRs, the equivalent of 496 MTD. Also, the balance
of medium and long term loan capital recovered markedly yielding a surplus of 459 MTD in
2009, compared to a deficit of 4 MTD in 2008. The high level of drawings on this capital
helped to more than offset expenditure to draw down on medium and long term debt.
BALANCE OF MEDIUM AND LONG TERM LOAN CAPITAL
        Description          2005     2006                     2007             2008        2009
 Receipts (in MTD)                   2,125           1,941     2,157            1,745        2,726
 Annual variation (%)                -30.8             -8.7     11.1            -19.1         56.2
 Expenditure (in MTD)                1,876           2,991     2,447            1,749        2,267
 Annual variation (%)                  -0.5           59.4     -18.2            -28.5         29.6
       Balance (In MTD)                249          -1,050      -290               -4          459

(i) Drawings on medium and long term loan capital
After having posted a drop of 19.1% in 2008, drawings on medium and long term loan capital
recorded a 56.2% increase in 2009 to 2,726 MTD.
BREAKDOWN OF DRAWINGS BY TYPE OF COOPERATION
                                  2008                                            2009
       Description
                           In MTD      Share (%)                        In MTD           Share (%)
 Administration                       833              100,0            1,227             100.0
 Bilateral cooperation                387               46.5              380              31.0
 Multilateral cooperation             446               53.5              847              69.0
 Financial markets                      0                0.0                0               0.0
 Companies                            912              100,0            1,499             100.0
 Bilateral cooperation                255               28.0              452              30.2
 Multilateral cooperation             465               51.0              956              63.8
 Financial markets                    192               21.0               91               6.0
 Total                              1,745              100,0            2,726             100.0
 Bilateral cooperation                642               36.8              832              30.5
 Multilateral cooperation             911               52.2            1,803              66.1
 Financial markets                    192               11.0               91               3.4

The high increase in drawings was due mainly to the increase in funds mobilised in the
framework of multilateral cooperation, which almost doubled : from 911 MTD to 1,803 MTD,
following an increase in funds mobilized with respect to the main international institutions.
Drawings from the African Development Bank shot up from 170 MTD in 2008 to 517 MTD
in 2009. These funds served mainly to finance the programme to support integration
(125 million US dollars) and plans to develop the road network (60 million euro).



                                              164
Funds secured from the European Investment Bank also increased (up from 289 MTD in
2008 to 485 MTD in 2009), destined to finance a number of initiatives, notably the Enfidha
Airport and the Tuniso-Indian phosphoric acid limited liability company TIFERT.
Similarly, drawings on funds contracted with the World Bank group went up, from 211 MTD in
2008 to 307 MTD in 2009, of which 167 MTD (125 million US dollars) went to finance the
programme to support integration and competitiveness. Besides, drawings on funds from the
Islamic development Bank went up from 59 MTD in 2008 to 291 MTD in 2009, meant mainly
to finance STEG initiatives. Drawings mobilised from the Arab Fund for Economic and Social
Development (AFESD) maintained almost the same level : 127 MTD in 2009 vs. 125 MTD in
2008.

Drawings on medium and long term loan capital in the framework of bilateral cooperation
increased by 29.6% to 832 MTD in 2009. The increase in drawings involved mainly funds
granted by France (448 MTD vs. 395 MTD in 2008) and Spain (177 MTD vs. 36 MTD in
2008). As for financing on the international financial markets in 2009, businesses mobilized
some 91 MTD while the Administration did not raise any funds given the instability prevailing
on these markets and tougher loan conditions.

Breakdown of drawings on medium and long term loan capital by category of beneficiary
showed an increase in funds mobilised by both the Administration and businesses.

Funds mobilised by the Administration went up by 47.3% in 2009 to 1,227 MTD, despite the
slight decrease of funds secured from partner countries, down from 387 MTD in 2008 to
380 MTD in 2009. The increase from 2008 to 2009 was due to the increase in drawings from
international organisations, which rose from 446 MTD in 2008 to 847 MTD in 2009. Still, the
Administration’s share in overall resources mobilised regressed from 47.7% in 2008 to 45%
in 2009.

Funds mobilised by businesses posted an increase, up by 64.4% : from 912 MTD in 2008 to
1,499 MTD in 2009, a trend influenced by the higher level of drawings granted to companies
by partner countries (452 MTD in 2009 vs. 255 MTD in 2008), as well as drawings in the
framework of multilateral cooperation (956 MTD in 2009 vs. 465 MTD in 2008). However
raise of funds on the international financial markets went down from 192 MTD in 2008 to
91 MTD in 2009.

Breakdown of corporate drawings by beneficiary sector shows that 35.7% of mobilised flows
(or 535 MTD) were secured by companies in the energy sector. Funds going to other sectors
(such as the financial and transport sectors) came respectively at 131 MTD and 509 MTD to
represent 8.7% and 34% of total. Operators working in other sectors secured 325 MTD or
21.6% of overall funds going to businesses.

For 2009, financial drawings along with transfer of funds came to 1,824 MTD, representing
66.9% of total vs. 1,276 MTD and 73.1% in 2008. The remaining 33.1% (902 MTD) took the
form of commercial use along with medium and long term facilities granted to businesses.


                                            165
(ii) Retirement of medium and long term debt
Repayment of principal on medium and long term debt posted an increase of 29.6% to
2,267 MTD in 2009, compared to 1,749 MTD in 2008. This increase concerned payments in
the framework of bilateral cooperation (from 730 MTD in 2008 to 834 MTD in 2009) and the
international financial market (from 184 MTD to 708 MTD). Repayment of the principal on
medium and long term indebtedness to international organisations fell by 13.2% to 725 MTD.
BREAKDOWN OF MEDIUM AND LONG TERM DEBT RETIREMENT BY TYPE OF COOPERATION
                                            2008                           2009
          Description
                                   In MTD          Share (%)      In MTD          Share (%)
 Administration                       840           100.0          1,189            100.0
 Bilateral cooperation                358            42.6            380             32.0
 Multilateral cooperation             482            57.4            382             32.1
 Financial markets                      0             0.0            427             35.9
 Companies                            909           100.0          1,078            100.0
 Bilateral cooperation                372            40.9            454             42.1
 Multilateral cooperation             353            38.8            343             31.8
 Financial markets                    184            20.3            281             26.1
 Total                              1,749           100.0          2,267            100.0
 Bilateral cooperation                730            41.7            834             36.8
 Multilateral cooperation             835            47.8            725             32.0
 Financial markets                    184            10.5            708             31.2

By category of borrower, payments by the Administration rose by 41.5% to 1,189 MTD in
2009, compared to 840 MTD in 2008. This increase involved in particular payments to the
international financial market and those contracted in the framework of bilateral cooperation,
while repayments in the framework of multilateral cooperation went down.
Payments by the Administration to the international financial market went up to 427 MTD, an
amount that corresponds to repayment of a debenture loan secured on this market in 1999 in
the amount of 225 million euro.
Repayments made by the Administration to partner countries went up by 6.1% in 2009 to
380 MTD vs. 358 MTD a year earlier. This increase involved in particular France (from
135 MTD in 2008 to 140 MTD), Japan (from 73 MTD in 2008 to 95 MTD) and Spain (from
13 MTD in 2008 to 15 MTD), while payments made by the Administration to the United
States and Kuwait fell from 29 MTD and 11 MTD respectively in 2008 to 26 MTD and 9 MTD
in 2009.
On the other hand, payments by the Administration to international institutions dropped by
20.7% to 382 MTD, down from 482 MTD in 2008. This drop was due mainly to the lower level
of repayments to the World Bank group, which came to 160 MTD vs. 283 MTD in 2008.
Payments to the African Development Bank (ADB), the Arab Fund for Economic and Social
Development (AFESD) and the Islamic Development Bank (IDB), posted slight increases,
from 68 MTD in 2008 to 76 MTD in 2009 for ADB, from 53 MTD to 59 MTD for AFESD, and
from 3 MTD to 9 MTD for IDB. Payments to the European Investment Bank maintained
almost the same level as in 2008 : 63 MTD.
Corporate repayment of capital on medium and long term debt went up by 18.6% in 2009 to
1,078 MTD. This increase was due to the increase in repayments to partner countries, up

                                             166
from 372 MTD in 2008 to 454 MTD in 2009, and to the international financial market, up from
184 MTD to 281 MTD in 2009 ; while repayments to international organisations posted
decrease of 2.8% to 343 MTD in 2009 vs. 353 MTD in 2008.
The higher level of corporate repayments in the framework of bilateral cooperation involved
in particular France (239 MTD vs. 193 MTD in 2008), Germany (50 MTD vs. 39 MTD in 2008)
and Japan (64 MTD vs. 48 MTD in 2008).
The drop in payments made to international organisations concerned in particular the Islamic
Development Bank (22 MTD in 2009 vs. 46 MTD in 2008) and the African Development Bank
(112 MTD in 2009 vs. 156 MTD in 2008), while repayments to the European Investment
Bank, the World Bank and the Arab Fund for Economic and Social Development (AFESD)
went up from 59 MTD, 47 MTD and 22 MTD respectively in 2008 to 85 MTD, 63 MTD and
30 MTD in 2009.
C. OVERALL EXTERNAL POSITION
Tunisia’s overall external position yielded net liabilities abroad in the amount of 56,387 MTD at
the end of 2009 vs. 52,282.6 MTD at the end of 2008, an increase of 4,104.4 MTD or 7.9%.
This increase was due to an increase in gross liabilities in the form of foreign investment and
the outstanding balance of medium and long term debt. Aside from the volume effect, the
increase in these liabilities was caused by price and foreign exchange effects. Moreover, the
integration of allocations in SDRs in other investment amp-lified Tunisia’s gross liabilities
abroad.




                                              167
OVERALL EXTERNAL POSITION OF TUNISIA                                         (Year-end outstanding, in MTD)
          Description            2006                           2007              2008            2009
    Direct investment                         -28,203.0       -31,831.3        -37,894.0        -41,659.1
    Assets                                        114.9           143.0            202.4            306.3
    Liabilities                               -28,317.9       -31,974.3        -38,096.4        -41,965.4
    Portfolio investment                       -1,439.7        -1,813.1         -2,031.9         -2,654.4
    Assets                                         76.9            81.5             88.8             92.8
       Investment securities                       76.9            81.5             88.8             92.8
       Claim securities                               0               0                0                0
    Liabilities                                -1,516.6        -1,894.6         -2,120.7         -2,747.2
       Equity securities                       -1,473.8        -1,827.6         -2,053.7         -2,680.2
       Debt securities                            -42.8           -67.0            -67.0            -67.0
    Other investment                          -21,365.9       -21,627.1        -24,098.8        -25,019.9
    Medium and long term loans and
    borrowings to the Administration          -13,470.4       -13,499.4        -14,753.5        -14,898.5
     Assets                                           0               0                0                0
     Liabilities1                             -13,470.4       -13,499.4        -14,753.5        -14,898.5
       Public origin                           -7,650.6        -7,618.0         -8,032.5         -8,572.4
       Private origin                          -5,819.8        -5,881.4         -6,721.0         -6,326.1
    Medium and long term loans and
    borrowings to the companies                -6,355.0        -6,385.5         -6,692.3         -7,338.2
     Assets                                       129.7           122.1            131.0                0
     Liabilities1                              -6,484.7        -6,507.6         -6,823.3         -7,338.2
       Public origin                           -3,851.5        -4,475.8         -4,774.4         -5,560.2
       Private origin                          -2,633.2        -2,031.8         -2,048.9         -1,778.0
    Other medium & long term liabilities2         -67.0           -66.2            -69.8           -560.7
    Short term loan                            -1,473.5        -1,676.0         -2,583.2         -3,222.5
    Financial                                  -1,508.1        -1,564.8         -2,210.0         -2,719.8
     Assets                                     1,289.0         1,882.4          1,611.0          1,910.4
     Liabilities                               -2,797.1        -3,447.2         -3,821.0         -4,630.2
    Commercial                                     34.6          -111.2           -373.2           -502.7
     Assets                                     1,592.6         1,304.9          1,473.3          1,191.9
     Liabilities                               -1,558.0        -1,416.1         -1,846.5         -1,694.6
    Reserve assets                              8,806.7         9,689.4         11,742.1         13,946.4
    Monetary gold                                   4.4             4.4              4.4              4.4
    Special drawing rights                          6.3             7.0             11.7            501.9
    Reserve position at IMF                        39.7            39.9             38.5             42.6
    Foreign currency                            8,756.3         9,638.1         11,687.5         13,397.5
                           Total              -42,201.9       -45,582.1        -52,282.6        -56,387.0

Reserve assets, made up for the most part of assets in foreign currency, went up significantly in
2009, influenced by notable improvement in the balance of the general balance of payments
illustrated by a surplus of 2,204 MTD reflecting, aside from the increase in foreign currency
assets, the higher level of SDR assets in the wake of IMF allocation in SDRs to Tunisia of
238.5 million SDRs.
1. FOREIGN DIRECT INVESTMENT
Tunisia’s gross liabilities in the form of foreign direct investment came to 41,965.4 MTD at
the end of 2009, recording an increase of 3,869 MTD or 10.2%. Aside from the price effect,


1
  Including accrued but not yet falling due interest.
2
  This concerns SDR allocations which are henceforth accounted for under medium and long term external
liabilities as per IMF recommendations.
                                                    168
this increase was the result of mobilisation in 2009 of direct investment flows to Tunisia,
which reached some 2.3 billion dinars.
Assets went up by 51.3% to 306.3 MTD as of the end of 2009, compared to 41.5% and
202.4 MTD a year earlier. This trend was due to the higher increase in 2009 of investment
flows from Tunisians contracted abroad.
Consequently, net liabilities went up by 3,765.1 MTD (9.9%) to 41,659.1 MTD at the end of
2009 vs. 37,894 MTD at the end of 2008.
2. PORTFOLIO INVESTMENT
Gross liabilities in the form of portfolio investments amounted to 2,747.2 MTD at the end of 2009,
an increase of 626.5 MTD or 29.5% compared to the 2008 figure. This trend was due mainly to
an increase in prices for securities traded on the Tunis stock exchange, a trend reflected in the
TUNINDEX, which rose by 48.4% in 2009 vs. 10.7% a year earlier.
Assets rose to 92.8 MTD at the end of 2009 vs. 88.8 MTD at the end of 2008. Consequently,
the total of net commitments in the form of portfolio investments went up by 30.6% to
2,654.4 MTD at the end of 2009 vs. 2,031.9 MTD at the end of 2008.
3. OTHER INVESTMENTS
Net liabilities stocks with respect to other investments amounted to 26,019.9 MTD at end
2009 vs. 24,098.8 MTD at end 2008, up by 1,921.1 MTD or 8%. This trend was led by higher
gross liabilities in this respect along with an increase in the outstanding balance of medium
and long term debt and short term liabilities. IMF SDR allocations release in 2009 of
238.5 million SDRs had further amplified liabilities stocks with respect to other investment.
a. Medium and long term indebtedness
The outstanding balance of medium and long term debt came to 21,977 MTD at the end of
2009, compared to 21,301 MTD at the end of 2008. This trend was caused by the high level
of drawings on medium and long term loan capital, which were greater than repayments to
draw down medium and long term debt, yielding positive net flows of 459 MTD. Aside from
the volume effect, trends in the outstanding balance of debt reflects the exchange effect
resulting from depreciation, from one year to the next, of the dinar against the main
currencies of indebtedness.
Nevertheless, the rate of indebtedness expressing the ratio between the outstanding balance
of medium and long term debt and gross national disposable income (GNDI) went down by
1.5 percentage point to 37.3 % at the end of 2009, compared to 38.8% at the end of 2008.
The coefficient of medium and long term debt service as a ratio of current receipts went up by
2.8 percentage points to 10.5% in 2009, a result influenced by the combined effect of a 20.4%
increase in servicing medium and long term debt and a 12% drop in current receipts.




                                               169
MAIN PARAMETERS OF MEDIUM AND LONG TERM EXTERNAL DEBT
                                                                                   (In MTD unless otherwise indicated)
                   Description                           2005          2006          2007         2008       2009
    Outstanding medium & long term debt                 20,373        19,683         19,728       21,301    21,977
    Rate of indebtedness (% of GNDI)                      48.9          43.0           39.7         38.8      37.3
    Medium & long term debt service                      2,716         3,881          3,334        2,608     3,139
      Principal                                          1,876         2,991          2,447        1,749     2,267
      Interest                                             840           890            887          859       872
    Debt service ratio (In %)1                            12.8          16.4           11.7          7.7      10.5
1
    Calculated with reference to current receipts.

Net transfer of medium and long term loan capital continued to yield net expenditure of 413 MTD,
compared to 863 MTD in 2008 attributable to faster progress in drawings than in medium and
long term debt service.
NET TRANSFERS OF MEDIUM AND LONG TERM BORROWING CAPITAL                                                     (In MTD)
          Description          2005     2006     2007                                            2008       2009
    Medium and long term drawings                    2,125         1,941        2,157            1,745       2,726
    Medium and long term debt service                2,716         3,881        3,334            2,608       2,139
    Net transfers                                    -591          -1,940       -1,177            -863        -413

b. Short term external loan
At the end of 2009, short term net liabilities came to 3,223 MTD vs. 2,584 MTD at the end of
2008, an increase of 639 MTD or 24.7%. This increase concerned both financial and
commercial net liabilities.
Short term financial loans yielded net commitments amounting to 2,720 MTD at the end of
2009, compared to 2,210 MTD at the end of 2008, an increase of 23.1% because of the
increase in gross liabilities in this area that grew at a faster pace than assets : 21.2% and
18.6% respectively, amounting to 4,630 MTD and 1,910 MTD at the end of 2009, compared
to 3,821 MTD and 1,611 MTD at the end of 2008.
TREND IN SHORT TERM LOANS                                                      (In MTD unless otherwise indicated)
                           Description                                      2007               2008         2009
 Short term liabilities                                                     -4,863            -5,668       -6,325
 *Financial loan                                                            -3,447            -3,821       -4,630
  of which : - non resident deposits                                        -2,594            -3,127       -3,402
              - bank correspondents outside Tunisia                           -791              -645       -1,173
 *Commercial loan1                                                          -1,416            -1,847       -1,695
 Short term assets                                                           3,187             3,084        3,102
 *Financial loan                                                             1,882             1,611        1,910
 *Commercial loan1                                                           1,305             1,473        1,192
 Net liabilities                                                            -1,676            -2,584       -3,223
  Net liabilities/reserve assets (In %)                                       17.3              22.0         23.1
  Short term liabilities/reserve assets (In %)                                50.2              48.3         45.4
  Financial liabilities/reserve assets (In %)                                 35.6              32.5         33.2
  Commercial liabilities/reserve assets (In %)                                14.6              15.7         12.2
 Reserve assets                                                              9,689            11,742       13,946




1
    As of 2001, stock of short term commercial loans is calculated in gross terms instead of net terms.
                                                             170
The amount of short term commercial loans yielded net liabilities of 502.7 MTD compared to
373.2 MTD at the end of 2008. This trend was led by the decrease of assets at a faster pace
than liabilities : 19.1% and 8.2% to 1,191.9 MTD and 1,694.6 MTD respectively.
4. RESERVE ASSETS
The level of reserve assets rose to 13,946.4 MTD at the end of 2009, compared to
11,742.1 MTD at the end of 2008, an improvement attributable to the positive result in the
general balance of payments, which posted a surplus of 2,204 MTD.
The main component of reserve assets, gross assets in foreign currency posted a net
increase of 13,397.5 MTD at the end of 2009, vs. 11,687.5 MTD at the end of 2008.
Consequently, net assets in foreign currency increased by 14.6% to 13,352.9 MTD or
186 days of imports, compared to 11,656 MTD or 139 days of imports at the end of 2008.
Other components of reserve assets were marked by the higher level of special drawing
rights (SDRs), which rose from 12 MTD at the end of 2008 to 502 MTD at the end of 2009,
following release by the International Monetary Fund of 496.4 MTD (238.5 million SDRs) to
Tunisia.
Similarly, IMF’s reserve position went up slightly to 42.6 MTD at the end of 2009, compared
to 38.5 MTD at the end of 2008, while reserves in monetary gold remained at the same level
as at the end of 2008 : 4.4 MTD.




                                           171
TUNISIA’S EXTERNAL PAYMENTS : TRENDS IN CURRENT RECEIPTS AND CAPITAL INFLOWS
(5th edition)                                                                     (In MTD)
            Description                         2006       2007       2008       2009
A – CURRENT RECEIPTS                        23,718.9      28,551.0   34,089.1   29,994.4

 EXPORT OF GOODS (FOB)                      15,558.1      19,409.6   23,637.0   19,469.2

 SERVICES                                       5,716.7    6,305.6    7,409.3    7,424.7

 TRANSPORTS                                     1,655.1    1,840.6    2,334.9    1,866.2
 Freight                                          134.3      138.8      159.8      147.1
 Passengers                                       933.9    1,023.0    1,177.7    1,014.4
 Other transports                                 586.9      678.8      997.4      704.7
  Of which : gas royalties                        359.7      410.7      653.2      433.9

 TRAVEL                                         3,028.1    3,299.6    3,639.1    3,744.5
 Tourism                                        2,825.2    3,077.3    3,390.2    3,471.9
 Professional and official travel                  56.5       61.5       67.8       75.9
 Studies and training                              24.7       25.5       27.6       29.8
 Medical care                                      55.0       67.0       84.5      111.6
 Other living expenses                             66.7       68.3       69.0       55.3

 GOVERNMENT TRANSACTIONS                         177.1      195.0      225.2      348.5
 Tunisian government                                 0          0          0          0
 Foreign governments                             177.1      195.0      225.2      348.5

 OTHER SERVICES                                  856.4      970.4     1,210.1    1,465.5
 Insurance premiums and benefits                  53.1       54.9        52.3       76.6
 Office costs                                    107.4      115.3       119.9      120.2
 Commercial & international trade costs          188.9      190.8       224.4      222.5
 Large scale works & technical services          212.7      246.9       366.5      516.0
 Communication services                           96.3      153.5       204.0      307.2
 Financial services                               87.4       89.7       106.0       82.4
 Computer and information services                32.0       34.0        43.6       54.7
 Royalties and licence rights                     34.9       37.5        36.5       33.8
 Staff and cultural services                       3.5        4.4         7.2        9.0
 Miscellaneous                                    40.2       43.4        49.7       43.1

 FACTOR INCOME                                  2,223.2    2,574.2    2,768.2    2,760.3
 Capital income                                   213.3      375.7      332.3      107.7
  Interest on loans and investment                201.3      362.2      316.7       92.3
  Dividends and profits                             3.2        5.4        6.4        9.9
  Direct investment income                          8.8        8.1        9.2        5.5
 Labour income                                  2,009.9    2,198.5    2,435.9    2,652.6
  Worker remittances                            1,735.3    1,853.2    2,125.6    2,331.4
  Other labour income                             274.6      345.3      310.3      321.2

 CURRENT TRANSFERS                               220.9      261.6      274.6      340.2
 Tunisian private sector                         112.2      135.3      135.7      143.5
 Tunisian public sector                          108.7      126.3      138.9      196.7




                                          172
                                                                                              (In MTD)
                  Description                           2006        2007         2008        2009

B – CAPITAL & FINANCIAL TRANSACTIONS                    6,811.3     5,042.5     6,252.1      6,496.8

CAPITAL TRANSACTIONS                                     198.7       214.7        100.7        226.9

FINANCIAL TRANSACTIONS                                  6,612.6     4,827.8     6,151.4      2,269.9

DIRECT INVESTMENTS                                      4,406.5     2,075.3     3,403.7      2,287.4
 Assets                                                     3.6         4.5         5.0          8.7
 Liabilities                                            4,402.9     2,070.8     3,398.7      2,278.7
  Shareholding                                          4,401.1     2,068.4     3,396.6      2,275.7
  Others                                                    1.8         2.4         2.1          3.0

PORTFOLIO INVESTMENTS                                    158.8         87.1       198.5         78.3
Public sector                                                0            0           0            0
Assets                                                       0            0           0            0
Liabilities                                                  0            0           0            0
Private sector                                           158.8         87.1       198.5         78.3
Assets                                                       0            0           0            0
Liabilities                                              158.8         87.1       198.5         78.3

* OTHER INVESTMENT                                      2,047.3     2,665.4     2,549.2      3,904.2

MEDIUM AND LONG TERM LOANS AND
BORROWINGS OF THE GOVERNMENT                             837.4      1,229.9       833.2      1,251.8
 Loans                                                       0            0           0         25.3
 Borrowings                                              837.4      1,229.9       833.2      1,226.5
 Public origin                                           658.2        831.9       727.9      1,142.0
  Private origin                                         179.2        398.0       105.3         84.5

MEDIUM AND LONG TERM LOANS AND
BORROWINGS OF BUSINESSES                                1,103.4      927.3        911.8      1,499.1
 Loans                                                        0          0            0            0
 Borrowings                                             1,103.4      927.3        911.8      1,499.1
  Public origin                                           631.8      594.8        549.2      1,264.7
  Private origin                                          471.6      332.5        362.6        234.4


OTHER MEDIUM & LONG TERM LIABILITIES1                        -           -            -       496.4
SHORT TERM CAPITAL (net flows)                           106.5       508.2        804.2       656.9
 Assets                                                   25.7           0            0           0
 Liabilities                                              80.8       508.2        804.2       656.9

C-ADJUSTMENT OPERATIONS
(net flows)                                                    0           0      139.5         89.2

                    GENERAL TOTAL                      30,530.2    33,593.5    40,480.7     36,580.4

1
   This concerns SDR allocations which are henceforth accounted for under medium and long term external
liabilities as per IMF recommendations.
                                                 173
TUNISIA’S EXTERNAL PAYMENTS : TRENDS IN CURRENT EXPENDITURE AND CAPITAL
OUTFLOWS (5th edition)                                           (In MTD)
            Description                         2006      2007       2008        2009
A - CURRENT EXPENDITURE                     24,543.3      29,725.9   36,198.2   31,660.3

 IMPORT OF GOODS (FOB)                      18,903.3      23,094.6   28,577.9   24,463.5

 SERVICES                                       3,267.0    3,606.5    4,152.7    4,015.8

 TRANSPORT                                      1,643.8    1,869.6    2,298.6    2,004.2
  Freight                                         998.5    1,209.7    1,496.8    1,271.8
  Passengers                                      117.2      118.7      119.7       85.0
  Other transport                                 528.1      541.2      682.1      647.4

 TRAVEL                                          545.7      560.1      564.7      560.4
  Tourism                                        323.3      330.7      323.9      368.1
  Professional and official travel                58.9       64.9       68.0       62.6
  Studies and training                            79.1       80.9       83.6       95.9
  Medical care                                     8.4       10.4       11.2       16.7
  Other living expenses                           76.0       73.2       78.0       17.1

 GOVERNMENT TRANSACTIONS                         155.1      179.9      177.1      218.9
  Tunisian Government                            155.1      179.9      177.1      218.9
   -Technical assistance                          20.6       27.6       15.6       27.7
   - Other                                       134.5      152.3      161.5      191.2
  Foreign governments                                0          0          0          0

 OTHER SERVICES                                  922.4      996.9     1,112.3    1,232.3
 Insurance premiums and benefits                 189.4      198.8       236.3      284.5
 Office costs                                     14.7       16.8        17.0       18.9
 Commercial & international trade costs          123.4      134.1       144.5      137.8
 Large scale works & technical services          301.6      345.4       405.7      457.1
 Communication services                           40.9       38.2        40.5       55.5
 Financial services                               86.9       89.1        89.8       88.8
 Computer and information services                23.7       28.6        25.2       29.2
 Royalties and licence rights                     14.2       13.0        15.4       18.6
 Staff and cultural services                      13.0       12.3        13.4       15.0
 Miscellaneous                                   114.6      120.6       124.5      126.9

FACTOR INCOME                                   2,346.2    2,993.7    3,442.7    3,153.2
 Capital income                                 2,324.3    2,974.2    3,423.3    3,135.8
   Interest on medium & long term loans           889.9      886.8      858.9      871.5
   Interest on short term loans                    39.1       65.6       57.0       54.0
   Dividends and profits                           67.5       58.8       85.1       60.8
   Direct investment income                     1,315.4    1,951.3    2,412.3    2,144.5
   Rent                                            12.4       11.7       10.0        5.0
 Labour income                                     21.9       19.5       19.4       17.4
   Work remittances                                 9.2        9.3        6.8        9.4
   Other labour income                             12.7       10.2       12.6        8.0

CURRENT TRANSFERS                                 26.8        31.1       24.9       27.8
 Tunisian private sector                          23.3        26.7       24.6       27.6
 Tunisian public sector                            3.5         4.4        0.3        0.2



                                          174
                                                                             (In MTD)
             Description                   2006      2007       2008         2009

B – CAPITAL & FINANCIAL TRANSACTIONS      3,163.5    2,937.6    2,229.8     2,715.8

CAPITAL TRANSACTIONS                          5.8        2.6        3.5         4.8

FINANCIAL TRANSACTIONS                    3,157.7    2,935.0    2,226.3     2,711.0

DIRECT INVESTMENTS                           94.1     133.6      199.3       227.9
 Assets                                      44.0      25.7       51.6       103.5
 Liabilities                                 50.1     107.9      147.7       124.4
  Shareholding                               46.9      92.3      134.9       115.8
  Other                                       3.2      15.6       12.8         8.6

PORTFOLIO INVESTMENTS                        72.5       48.7     246.6       198.0
Public sector                                   0          0         0           0
Assets                                          0          0         0           0
Liabilities                                     0          0         0           0
Private sector                               72.5       48.7     246.6       198.0
Assets                                          0          0         0           0
Liabilities                                  72.5       48.7     246.6       198.0

OTHER INVESTMENT                          2,991.1    2,752.7    1,780.4     2,285.1

MEDIUM AND LONG TERM LOANS AND
BORROWINGS OF THE GOVERNMENT              1,730.6    1,454.4     839.9      1,188.7
 Liabilities                              1,730.6    1,454.4     839.9      1,188.7
 Public origin                            1,263.2    1,078.3     790.9        991.8
  Private origin                            467.4      376.1      49.0        196.9

MEDIUM AND LONG TERM BORROWINGS
OF BUSINESSES                             1,260.5     992.6      909.5      1,078.7
 Loans                                          0         0          0            0
 Borrowings                               1,260.5     992.6      909.5      1,078.7
  Public origin                             328.5     330.6      357.0        371.0
  Private origin                            932.0     662.0      552.5        707.7

SHORT TERM CAPITAL (net flows)                 0      305.7        31.0        17.7
 Assets                                        0      305.7        31.0        17.7
 Liabilities                                   0          0           0           0

C-ADJUSTMENT OPERATIONS
  (net flows)                                50.1       47.3           0         0

GENERAL TOTAL                            27,756.9   32,710.8   38,428.0    34,376.1

      BALANCE                             2,773.3     882.7     2,052.7     2,204.3




                                   175
                                IX. FOREIGN EXCHANGE MARKET

The foreign exchange market in Tunisia posted a decrease of 21% in the overall volume of
spot transactions in 2009, influenced mainly by the drop in foreign trade. This held for both
transactions between foreign currency and the dinar and from one foreign currency to
another. On the other hand, forward foreign exchange transactions went up by 14%, while
foreign currency swap transactions against the dinar posted lower volume than in 2008.
As for the exchange rate, the dinar’s performance in 2009 was affected by the combined
effect of the following factors :
    * 5.2% depreciation of the euro against the US dollar, moving from 1.4706 dollar to the
euro in 2008 to 1.3942 in 2009
       * a drop in the inflation rate in Tunisia from 5% in 2008 to 3.7% in 2009.
A. TRENDS IN SPOT TRANSACTIONS BETWEEN THE TUNISIAN DINAR
AND THE MAIN FOREIGN CURRENCIES
In terms of annual averages, in 2009 the dinar depreciated against the Japanese yen
(17.2%), the US dollar (8.8%), the Moroccan dirham (4.9%) and the euro (3.9%). On the
other hand, it appreciated by 7.4% against the pound sterling.
AVERAGE RATES OF MAIN FOREIGN CURRENCIES AGAINST THE DINAR 1
                                                                              (In account and spot transactions)
                                                                                            Variation (%)2
     Description        2005           2006          2007           2008       2009
                                                                                          2008/07 2009/08
    1 US dollar          1.2981       1.3294         1.2799         1.2309    1.3494          +4.0          -8.8
    1 euro               1.6126       1.6709         1.7519         1.8051    1.8787          -2.9          -3.9
    1 pound
    sterling             2.3492       2.4372         2.5418         2.2613    2.1058         +12.4      +7.4
    1,000 Japanese
    yens                11.7453      11.3776       10.8007         11.9204   14.4034          -9.4      -17.2
    10 Moroccan
    dirhams              1.4601       1.5036         1.5485         1.5827    1.6634          -2.2          -4.9
1
  These are rates on the interbank market.
2
  (-) means a depreciation of the dinar, (+) an appreciation.

Furthermore, high volatility in the ratio between the euro and the US dollar (20.4%) in 2009
affected the extent of variation of the dinar against the Japanese yen (17.4%), the US dollar
(14.7%), the euro (6.6%) and the Moroccan dirham (5.5%).
RANGE OF FLUCTUATION OF MAIN FOREIGN CURRENCIES AGAINST THE DINAR
            Description                 1 USD/TND               1 EUR/TND    1,000 JPY/TND       10 MAD/TND

                                           1.4625                1.9267         16.0140             1.6935
    Highest level
                                        (04/03/2009)          (03/12/2009)    (02/02/2009)       (05/06/2009)
                                           1.2750                1.8067         13.6416             1.6051
    Lowest level
                                        (03/12/2009)          (15/01/2009)    (10/06/2009)       (07/01/2009)
    Range of fluctuation (%)                14.7                   6.6           17.4                 5.5




                                                         176
Trends in the dinar’s exchange rate against the US dollar went through three main phases.
The first lasted until 5 March, marked by downward movement for the dinar which, after
starting the year at 1.3166 posted 1.4616 at the end of the period, a drop of 9.9%. The dinar
then appreciated by 14.6% against the US dollar to post 1.2750 on 3 December. A new
phase of depreciation followed (-3.2%), bringing the dinar exchange rate at the end of the
year to 1.3173 TND to the dollar. Monthly averages showed the same trends, depreciating by
4.4% between January and February from 1.3730 TND to 1.4364 TND to the dollar. It then
appreciated by 11.7% to 1.2863 TND in November before depreciating once again by 1.5%
to 1.3053 TND to the dollar in December.

Against the euro, the dinar (which began the year at 1.8344) depreciated until 3 December,
losing 4.8% and coming to 1.9267 TND to the euro. The trend then reversed and the dinar
appreciated by 1.5% to close for the year at a rate of 1.8985 TND. This same trend held in
terms of monthly averages. Thus the dinar first depreciated by 5.1%, down from 1.8208 TND
in January to 1.9191 TND to the euro in November. It then appreciated by 0.6%, closing for
the year at 1.9074 TND to the euro.

                                          YEAR 2009

                 1 USD/TND                                          1 EUR/TND
  1.50                                    1.50         1.96                              1.96



  1.45                                    1.45
                                                       1.92                              1.92


  1.40                                    1.40

                                                       1.88                              1.88

  1.35                                    1.35


                                                       1.84                              1.84
  1.30                                    1.30



  1.25                                    1.25         1.80                              1.80
         Jan         Jun            Dec                       Jan      Jun         Dec



Concerning the JPY/TND ratio, the dinar started the year at 14.4650 TND for 1000 yens, and
then depreciated by 9.7% to 16.0140 on 2 February before posting an appreciation of 16.4%
to 13.7629 on 6 April. The rest of the year was a period of depreciation amounting to 2.4%,
with the dinar closing for the year at 14.1047. In terms of monthly averages the dinar first
depreciated by 1.9% until February, moving from 15.2204 TND to 15.5202 TND for 1,000 yen.
It then appreciated by 11.5%, posting 13.9147 TND in June. From June to December it
depreciated by 3.6%, closing for the year at 14.4280 TND for 1,000 yens.




                                                 177
                                           YEAR 2009
                  1000 YEN/TND                                              10 MAD/TND
   16.50                                  16.50         1.70                                       1.70


   16.00                                  16.00
                                                        1.68                                       1.68

   15.50                                  15.50
                                                        1.66                                       1.66
   15.00                                  15.00

                                                        1.64                                       1.64
   14.50                                  14.50

                                                        1.62                                       1.62
   14.00                                  14.00


   13.50                                  13.50         1.60                                       1.60
           Jan             Jun     Dec                         Jan            Jun            Dec

Against the Moroccan dirham and between the beginning of the year and 27 March the dinar
depreciated by 4%, from 1.6248 TND to 1.6924 TND for 10 Moroccan dirhams. Then the
trend reversed, posting appreciation of 1.9% for the dinar to close for the year at
1.6616 TND. In terms of monthly averages, the dinar initially depreciated by 1.9% until
March, from 1.6352 TND to 1.6669 TND for 10 dirhams. It then appreciated by 0.4%, posting
1.6600 TND in April. Between then and December there was depreciation of 0.3%, closing
for the year at 1.6642 TND for 10 Moroccan dirhams.
B. TRENDS IN FOREIGN EXCHANGE MARKET TRANSACTIONS
1. SPOT TRANSACTIONS
Trends in foreign trade in 2009 influenced the volume of foreign exchange spot transactions,
which fell by 10,356 MTD (21%) from the 2008 figure to 39,497 MTD. This drop involved both
transactions from foreign currency to dinars and from one foreign currency to another.
TRENDS IN SPOT TRANSACTIONS                                                                  (In MTD)
                                                                               Variation in MTD
             Description          2007            2008               2009
                                                                            2008/2007     2009/2008
 Transactions from foreign
  currency to dinars             12,238           19,211         15,775         6,973        -3,436
 Transactions from one foreign
  currency to another            23,328           30,642         23,722         7,314        -6,920
             Total               35,566           49,853         39,497        14,287       -10,356

a. Transactions between foreign currency and the dinar
Foreign exchange transactions between foreign currency and dinars amounted to
15,775 MTD in 2009, an average of 62.6 MTD a day vs. 19,211 MTD and 77.5 MTD
respectively a year earlier, a drop of 3,436 MTD or 18%. Trading between banks accounted
for 88% of overall transactions between foreign currency and the dinar in 2009, vs. 12% for
transactions with the Central Bank. This compares to 83% and 17% respectively in 2008,
reflecting liquidity on the market.

                                                  178
Central Bank intervention came to 1,904 MTD in 2009 compared to 3,238 MTD in 2008,
a decrease of 1,334 MTD. Similarly, transactions on the interbank market went down by
2,102 MTD.
Breakdown of interbank transactions by category of bank shows that resident banks
dominated this market sector, with a 79% share of overall volume and 21% for offshore
banks.
TRENDS IN FOREIGN CURRENCY/DINAR TRANSACTIONS                (In MTD unless otherwise indicated)
                                                                             Variation (%)
          Description                2007           2008       2009
                                                                        2008/2007 2009/2008
Interbank market                     11,128         15,973   13,871         43.5        -13.2
 Resident banks                       9,075         12,793   10,983         41.0        -14.1
 Offshore banks                       2,053          3,180    2,888         54.9         -9.2
Central Bank of Tunisia               1,110          3,238    1,904        191.7        -41.2
            Total                    12,238         19,211   15,775         57.0        -17.9

Breakdown by foreign currency shows that the share of dollar/dinar transactions in overall
volume dropped from 41% in 2008 to 34% in 2009, while the share of euro/dinar transactions
rose from 58% in 2008 to 64%. Transactions in yen remained at the same level of 1%.
BREAKDOWN BY FOREIGN CURRENCY OF TRANSACTIONS ON THE SPOT FOREIGN
EXCHANGE MARKET
                          Interbank market          Central Bank               Total
   Year    Currency     Amount       Share      Amount       Share       Amount    Amount
                        In MTD        In %      In MTD        In %       In MTD      In MTD
             USD          4,376        39.3            364      32.8        4,740         38.7
            EURO          6,561        59.0            717      64.6        7,278         59.5
   2007      YEN            122         1.1              0         0          122          1.0
            Others           69         0.6             29       2.6           98          0.8
            Total        11,128       100.0          1,110     100.0       12,238        100.0
             USD          6,049        37.9          1,735      53.6        7,784         40.5
            EURO          9,742        61.0          1,468      45.3       11,210         58.4
   2008      YEN            115         0.7              0         0          115          0.6
            Others           67         0.4             35       1.1          102          0.5
            Total        15,973       100.0          3,238     100.0       19,211        100.0
             USD          4,885        35.2            529      27.8        5,414         34.3
            EURO          8,765        63.2          1,324      69.5       10,089         64.0
   2009      YEN            127         0.9              0         0          127          0.8
            Others           94         0.7             51       2.7          145          0.9
            Total        13,871       100.0          1,904     100.0       15,775        100.0

b. Transactions between foreign currency and convertible dinars
The volume of foreign exchange transactions involving foreign currency against the convertible
dinar carried out by authorised intermediaries and foreign correspondents went down by 21% in
2009, coming to 2,266 MTD vs. 2,878 MTD in 2008. Purchase of convertible dinars by foreign
correspondents represented 77% of global volume vs. 23% for sales (compared to 67% and
33% a year earlier).
c. Transactions from one foreign currency to another
Foreign exchange transactions from one foreign currency to another came to 23,722 MTD in
2009 vs. 30,642 MTD in 2008, a drop of 6,920 MTD or 23%. Similarly, their share in the
                                              179
overall volume of foreign exchange spot transactions fell from 61% in 2008 to 60% in 2009.
Transactions with foreign correspondents in 2009 represented 96% of overall transactions
from one foreign currency to another, compared to 94% in 2008.
TRENDS IN TRANSACTIONS FROM ONE FOREIGN CURRENCY TO ANOTHER
                                                               (In MTD unless otherwise indicated)
                                                                                    Variat. (%)
               Description                   2007         2008          2009        2009/2008
 Transactions between Tunisian Authorised
                                                886          1,953             1,062        -45.6
 Intermediaries
 Transactions with foreign correspondents    22,442       28,689            22,660          -21.0
 Total                                       23,328       30,642            23,722          -22.6

2. FORWARD TRANSACTIONS
The overall volume of forward foreign exchange transactions rose from 3,928 MTD in 2008 to
4,469 MTD in 2009, an increase of 541 MTD or 14%. This development could be linked to
the volatility in exchange rates prevailing over the period under review. The share of
transactions between Tunisian authorised intermediaries and companies in overall volume
went up from 96% in 2008 to 98% in 2009. The share of import coverage transactions (sale
by banks to businesses) in overall volume came to 82% vs. 18% for export coverage
transactions, the same levels as the previous year.
TRENDS IN FORWARD TRANSACTIONS                                                               (In MTD)
                                                                                 Variation in MTD
              Description                   2007      2008           2009
                                                                                2008/07    2009/08
Transactions between Tunisian Autho-
rised Intermediaries and businesses         3,138.9   3,767.6        4,386.7        628.7     619.1
Transactions on the interbank market          801.8     160.0           82.1       -641.8     -77.9
                   Total                    3,940.7   3,927.6        4,468.8        -13.1     541.2

Forward sale transactions by Tunisian authorised intermediaries to cover foreign exchange
risk incurred by importers posted an increase of 507 MTD. These transactions were for the
most part labelled in equal parts in US dollars and in euros (48%). Similarly, forward
purchase transactions to cover exports posted an increase of 113 MTD in 2009. The share of
transactions labelled in euros reached 56%, compared to 41% for the US dollar.
VOLUME OF FORWARD BUYING AND SELLING BY AUTHORISED INTERMEDIARIES
TO BUSINESSES                                                          (In MTD)
      Description         2007              2008              2009
  Forward purchase        422.0             688.3                800.9
  Forward sale          2,716.9           3,079.3              3,585.8
        Total           3,138.9           3,767.6              4,386.7

3. FOREIGN CURRENCY/DINAR EXCHANGE SWAP TRANSACTIONS
The volume of foreign exchange swap transactions fell from 1,565.4 MTD in 2008 to
821.5 MTD in 2009, a drop of 743.9 MTD. This being an instrument to hedge risk in foreign
exchange and cash management, the trend could be attributed to the existence of other
means to hedge foreign exchange risk (such as professional accounts in foreign currency or
forward foreign exchange) on the one hand and excess bank liquidity on the other. The
cumulative volume for these transactions since they were created in June 2001 came to
9,962 MTD, an annual average of 1,234 MTD.
                                             180
The share of foreign exchange swap transactions with foreign correspondents came to 47%,
compared to 46% for those carried out between authorised intermediaries and businesses
and 7% for transactions carried out on the interbank market. 53% of foreign exchange swap
transactions were labelled in euros and 47% in US dollars.
TRENDS IN FOREIGN CURRENCY/DINAR EXCHANGE SWAP TRANSACTIONS
                                                         Variation in MTD
          Description          2007    2008     2009
                                                       2008/2007 2009/2008
Interbank market                      132.3             3.2    58.5   -129.1       55.3
Transactions with foreign
correspondents                      1,560.5         1,426.9   387.2   -133.6    -1,039.7
Transactions between Tunisian
Authorised Intermediaries and
businesses                              3.0          135.3    375.8   132.3       240.5
Total                               1,695.8         1,565.4   821.5   -130.4     -743.9




                                              181
                                         X. PUBLIC FINANCES 1
To mitigate the impact of the crisis, especially on exporting businesses, and to maintain jobs
while also easing monetary policy, in July 2009 the Government introduced a support and
recovery programme to economic activity in the framework of the supplementary finance law.
Thus, 730 MTD in funds helped boost investment (357 MTD), maintain jobs (105 MTD),
support exports (45 MTD), increase corporate capital stock equity and back up upgrading
(153 MTD) and finance activities in the areas of maintenance and cleansing (70 MTD).
The impact of the budgetary programme for support and recovery to the economy was
evident in the level of domestic demand and the status of public finance. The budget deficit
exclusive of privatisation and grants was kept down to just 3% of GDP, below the 3.4% figure
projected in July 2009 in the supplementary finance law.
STATEMENT OF CENTRAL GOVERNMENT BUDGETARY FLOWS
                                                                          (In MTD unless otherwise indicated)
               Description                                           2009               Variation in %
                                          2007       2008
                                                                S.F.L.* Actual        2008/2007   2009/2008
    Core resources                       11,443.9   13,714.3   12,991.0   13,765.6        19.8         0.4
     - Tax revenue                        9,508.0   11,330.9   10,516.0   11,685.2        19.2         3.1
     - Non tax revenue                    1,935.9    2,383.4    2,475.0    2,080.4        23.1       -12.7
    Borrowed resources                    2,437.6    1,640.4    4,402.0    2,187.4       -32.7        33.3
    Drawing on the Treasury               1,206.0      713,8          0    1,462.4       -40.8       104.9
              Total resources            15,087.5   16,068.5   17,393.0   17,415.4         6.5         8.4
    Expenditure exclusive of debt
    principal                            12,348.0   13,934.4   14,843.0   15,354.3        12.8        10.2
     - Operating expenditure exclusive
       of equalisation                    6,622.2    7,228.1    7,968.0    7,934.8         9.1         9.8
     - Equalisation                       1,282.3    2,036.2    1,430.0    1,430.0        58.8       -29.8
     - Debt interest                      1,181.9    1,142.5    1,255.0    1,180.1        -3.3         3.3
     - Capital expenditure                2,793.7    3,315.1    4,090.0    4,013.6        18.7        21.1
     - Net loans and advances               467.9      212.5      100.0      795.8       -54.6       274.5
    Debt principal redemption             2,739.5    2,134.1    2,550.0    2,061.1       -22.1        -3.4
            Total expenditure            15,087.5   16,068.5   17,393.0   17,415.4         6.5         8.4
    Budget deficit excluding
    privatisation and grants              1,333.0     558.5     2,022.0    1,771.3
    In % of GDP                               2.7       1.0         3.4        3.0
    Budget deficit including
    privatisation and grants                904.1     220.1     1,852.0    1,588.7
    In % of GDP                               1.8       0.4         3.2        2.7
    Net Financing of the deficit          1,333.0     558.5     2,022.0    1,771.3
     - Privatisation and grants             428.9     338.4       170.0      182.6
     - Net domestic financing             1,332.6      89.2     1,852.0    1,613.3
     - Net external financing              -428.5     130.9           0      -24.6
* Supplementary finance law.

In this context of world economic crisis, the outstanding balance of Tunisia’s public debt was
marked by a continuation of downward trends, decreasing from 43.3% of GDP in 2008 to
42.9% in 2009. Public finance management in 2009 which posted results that were better
than projected in the framework of the supplementary finance law was marked by good
performance for core revenue, notably from taxes, as economic activity picked up in the
wake of gradual recovery in the world economy starting the second half of 2009 on the one
1
    Source : Ministry of Finance.
                                                     182
hand and by the drop in world prices that brought about lower expenditure for equalization
(-29.8%) on the other.
A. STATE BUDGET RESOURCES
Core revenue for the State budget (exclusive of cash resources) went up by a slight 0.4% in
2009, vs. a 5.3% drop projected and a 19.8% increase the year before. This took place after
3.1% growth in tax revenue in 2008 compared to -7.1% projected and 19.2% in 2008. Non tax
revenue dipped by 12.7% after rising by 23.1% in 2008, mainly because of a drop in income from
shareholdings (-17.7%) and the absence of income from privatisation. Gross borrowed resources
enjoyed 33.3% growth after the previous year’s drop of 32.7% to about 2,187 MTD or 12.6%
of overall budget resources, compared to 10.2% in 2008.
TRENDS IN STATE BUDGET RESOURCES EXCLUSIVE OF CASH RESOURCES                (In MTD)
                                               2009             Variation in %
      Description     2007     2008
                                       S.F.L.       Actual  2008/2007    2009/2008
 Core resources      11,443.9 13,714.3 12,991.0    13,765.6     19.8         0.4
 - Tax revenue        9,508.0 11,330.9 10,516.0    11,685.2     19.2         3.1
 - Non tax revenue    1,935.9  2,383.4  2,475.0     2,080.4     23.1       -12.7
 Borrowed resources   2,437.6  1,640.4  4,402.0     2,187.4    -32.7        33.3
 - Domestic           1,422.2    670.6  3,187.0     1,024.4    -52.8        52.8
 - External           1,015.4    969.8  1,215.0     1,163.0     -4.5        19.9
               Total 13,881.5 15,354.7 17,393.0    15,953.0     10.6         3.9

1. TAX REVENUE
Tax revenue experienced slower growth in 2009 (3.1% vs. 19.2% in 2008) to 11,685 MTD, but
this was well above the 10,516 MTD projected in the supplementary finance law, in line with
growing economic activity. Income tax in particular remained at about the same growth rate as
the year before (10.9% vs. 10.1%), while the indirect impact of the world financial crisis was
apparent in tax revenue from oil companies that dropped by 43.8% vs. an increase of 30.1% a
year earlier. Despite these diverging trends, the share of tax revenue in overall core resources
in the State budget in 2009 went up, posting 84.9% vs. 82.6% the year before. The tax burden
exclusive of oil came to 18.8% in 2009 (vs. 18.4% in 2008), while the overall tax burden
dropped from 20.5% of GDP in 2008 to 19.9%.
TRENDS IN TAX REVENUE                                           (In MTD unless otherwise indicated)
                                                            2009              Variation in %
        Description            2007        2008
                                                      S.F.L.     Actual    2008/2007   2009/2008
Direct taxes                   3,697.6    4,560.8    4,094.0    4,645.4       23.3         1.9
 Income tax                    1,948.8    2,145.3    2,285.0    2,379.4       10.1        10.9
 Corporate tax                 1,748.8    2,415.5    1,809.0    2,266.0       38.1        -6.2
   Of which : oil companies      884.1    1,150.0      720.0      646.8       30.1       -43.8
Indirect levies and taxes      5,810.4    6,770.1    6,422.0    7,039.8       16.5         4.0
 Customs duty                    514.3      584.7      470.0      520.2       13.7       -11.0
 VAT                           2,660.5    3,309.0    3,130.0    3,399.7       24.4         2.7
 Consumer duty                 1,361.6    1,464.8    1,440.0    1,596.2        7.6         9.0
 Other levies and taxes        1,274.0    1,411.6    1,382.0    1,523.7       10.8         7.9
    Total                      9,508.0   11,330.9   10,516.0   11,685.2       19.2         3.1
Overall tax burden
(in % of GDP)                    19.1        20.5       17.9       19.9
    - Oil                         1.8         2.1        1.2        1.1
    - Oil excluded               17.3        18.4       16.7       18.8




                                              183
a. Direct taxes
Direct taxes including taxes on oil activities rose by 1.9% in 2009 (vs. 23.3% in 2008), to an
amount higher than that envisaged in the supplementary finance law : about 4,645 MTD vs.
4,094 MTD. Such slower growth was attributable to lower income from tax on oil activities
(-43.8%), due mainly to a drop in oil prices on the international market (an average of some
$61.5 per barrel of Brent in 2009 vs. more than $97 in 2008). Aside from tax revenue from oil
activities, corporate tax continued to grow at a high rate of 27.9% (vs. 46.4% a year earlier) to
1,619 MTD. The share of direct tax in overall tax revenue remained virtually unchanged at
about 40% for the second straight year, with withholding remaining the most effective means of
tax collection (62% in 2009 vs. 56% in 2008).
b. Indirect levies and taxes
Indirect levies and taxes increased by 4% in 2009 (vs. 16.5% the year before) to about
7,040 MTD. This slower growth was attributable to both income from customs duty (+1.3%
vs. +20.4% in 2008) in line with lower imports and income generated by the domestic regime
(+6.1% vs. +13.7%). This took place in the wake of slower economic growth and higher tax
refund for VAT. The net difference in relation to 2008 performance came to about 270 MTD,
broken down as follows :
   - VAT : +91 MTD (3,400 MTD vs. 3,309 MTD),
   - Consumer duty : +131 MTD (about 1,596 MTD vs. 1,465 MTD),
   - Other indirect levies and taxes : +112 MTD (1,524 MTD vs. 1,412 MTD),
   - Customs duty : - 64 MTD (520 MTD vs. about 584 MTD).
The total amount of indirect levy and tax refund came to 416 MTD in 2009, of which 360 MTD
was for VAT, compared to 285 MTD and 238 MTD respectively a year earlier.
TRENDS IN INDIRECT LEVIES AND TAXES                                                      (In MTD)
                                                            2009              Variation in %
          Description               2007      2008
                                                       S.F.L.    Actual    2008/2007 2009/2008
 - Customs duty                      514.3     584.7     470.0     520.2      13.7      -11.0
 -VAT                              2,660.5   3,309.0   3,130.0   3,399.7      24.4        2.7
   . Domestic regime               1,346.1   1,627.4   1,600.0   1,714.4      20.9        5.3
   . Customs regime                1,314.4   1,681.6   1,530.0   1,685.3      27.9        0.2
 - Consumer duty                   1,361.6   1,464.8   1,440.0   1,596.2       7.6        9.0
   . Domestic regime                 823.5     883.6     895.0     944.5       7.3        6.9
   . Customs regime                  538.1     581.2     545.0     651.7       8.0       12.1
 - Other indirect levies & taxes   1,274.0   1,411.6   1,382.0   1,523.7      10.8        7.9
   . Domestic regime               1,173.0   1,288.0   1,291.0   1,372.4       9.8        6.6
   . Customs regime                  101.0     123.6      91.0     151.3      22.4       22.4
Indirect levies and taxes          5,810.4   6,770.1   6,422.0   7,039.8      16.5        4.0
   . Domestic regime               3,342.6   3,799.0   3,786.0   4,031.3      13.7        6.1
   . Customs regime                2,467.8   2,971.1   2,636.0   3,008.5      20.4        1.3

2. NON TAX REVENUE
Non tax revenue dropped in 2009 by 12.7% from the previous year’s figure to 2,080 MTD.
Aside from the absence of proceeds from privatisation, this was due to a drop in income from
shareholdings, which remains the main component of this category (at about 39% of total in


                                                184
2009 and 41% in 2008). The drop in income from shareholdings was due to integration of
central bank of Tunisia 2008 profits in 2010 balance.
TRENDS IN NON TAX REVENUE                                                                        (In MTD)
                                                                 2009                 Variation in %
       Description             2007        2008
                                                          S.F.L.     Actual       2008/2007 2009/2008
Oil and gas revenue             290.3       370.2        515.0        407.3           27.5        10.0
Shareholding                    580.5       976.7      1,256.0        803.8           68.3       -17.7
Loan collection                 176.3       257.3        141.0        224.3           45.9       -12.8
External grants                  37.6       191.5         70.0        182.6          409.3        -4.6
Privatisation proceeds          391.3       146.9        100.0            0          -62.5      -100.0
Other non tax resources         459.9       440.8        393.0        462.4           -4.2         4.9
          Total               1,935.9     2,383.4      2,475.0      2,080.4           23.1       -12.7

3. BORROWED RESOURCES
Faced with pressure on public finances and with a view to protecting the national economy
from the adverse effects of slowing world growth and conjunctural fluctuations, State
recourse to indebtedness (both domestic and external) posted a steep increase of 33.3% in
2009 (compared to a drop of 32.7% the year before), bringing the total to some 2,187 MTD.
TRENDS IN BORROWED RESOURCES                                                                      (In MTD)
                                                                   2009               Variation in %
            Description                 2007        2008
                                                              S.F.L.  Actual       2008/2007 2009/2008
Borrowed resources                      2,437.6     1,640.4   4,402.0   2,187.4        -32.7       33.3
- Domestic                              1,422.2       670.6   3,187.0   1,024.4        -52.8       52.8
 * 52 week Treasury bonds                 543.5       122.7     707.0     241.0        -77.4       96.4
 * Bonds equivalent to Treasury
    bonds (BTA)                           878.7      547.9    2,480.0     783.4        -37.6       43.0
- External                              1,015.4      969.8    1,215.0   1,163.0         -4.5       19.9
 * International financial market         107.5      227.4          0         0        111.5     -100.0
 * Direct payments (State projects)       537.5      574.9      763.9     689.2          7.0       19.9
 * Onlended loans                         158.0      167.5      100.0     125.8          6.0      -24.9
 * Others                                 212.4          0      351.1     348.0       -100.0

Further recourse to borrowed resources (+547 MTD, of which 354 MTD were domestic
borrowings) compared to those mobilised in 2008 was due essentially to an increase in the
level of the budget deficit including privatisation and grants amounting to some 1,369 MTD
(1,589 MTD vs. 220 MTD in 2008), resulting from the disproportionate increase in core
revenues (+0.4%) and expenditure exclusive of debt principal (+10.2%). The above mentioned
increase in borrowings (547 MTD) would have been greater if it had not been for the 73 MTD
drop in repayment of debt principal (some -422 MTD in domestic debt) and greater recourse to
cash resources (+748.6 MTD compared to the 2008 figure).
Borrowings in 2009 were marked by :
   - strong recovery in issues made on the local market in the form of Treasury bonds (about
1,024 MTD vs. 671 MTD in 2008), and
  - the absence for the second year in a row of bond issues on the international financial
market, offset in 2009 by mobilisation of 327 MTD in the framework of the programme to
support integration (PAI) signed with the African Development Bank ADB (125 million dollars)
and the programme to support integration and competitiveness (PAIC) signed with the world
bank (125 million dollars).

                                                    185
B. STATE BUDGET EXPENDITURE
Overall expenditure from the State budget went up at a faster pace in 2009 than in 2008
(8.4% vs. 6.5%) to about 17,415 MTD compared to the 17,393 MTD figure foreseen in the
supplementary finance law. Expenditure exclusive of settlement of debt principal grew more
slowly (+10.2% vs. +12.8% a year earlier), following a drop in equalisation expenditure
amounting to some 30%, influenced by lower international prices.
State expenditure was characterised in 2009 by :
   - higher outlays for civil service wages (537 MTD), as per the second portion of the wage
increase negotiated in the framework of the 2008-2010 three year programme,
   - the lower level of equalisation outlays (about -606 MTD) caused by falling commodity
prices on the international market,
   - higher capital expenditure, mainly tied to implementation of the recovery programme
adopted in the framework of the supplementary finance law, and
   - the approximately 349 MTD increase in settlement of external debt principal following
block repayment of a debenture loan on the international capital market.
TRENDS IN STATE BUDGET EXPENDITURE                                                        (In MTD)
                                                             2009               Variation in %
         Description              2007       2008
                                                       S.F.L.   Actual       2008/2007 2009/2008
Expenditure exclusive of debt    11,166.1   12,791.9   13,588.0   14,174.2      14.6      10.8
- Operating expenditure
   exclusive of equalisation      6,622.2    7,228.1    7,968.0    7,934.8       9.1       9.8
- Equalisation                    1,282.3    2,036.2    1,430.0    1,430.0       58.8    -29.8
- Capital expenditure             2,793.7    3,315.1    4,090.0    4,013.6       18.7     21.1
- Net loans and advances            467.9      212.5      100.0      795.8      -54.6    274.5
Debt service                      3,921.4    3,276.6    3,805.0    3,241.2      -16.4     -1.1
- Principal                       2,739.5    2,134.1    2,550.0    2,061.1      -22.1     -3.4
- Interest                        1,181.9    1,142.5    1,255.0    1,180.1       -3.3      3.3
                   Total         15,087.5   16,068.5   17,393.0   17,415.4       6.5       8.4

Analysis of State expenditure exclusive of debt (principal and interest) according to functional
breakdown shows, as in past years, that the social side of expenditure was dominant at 53%
of total (7,511 MTD) vs. about 58% (7,470 MTD) in 2008. Economic services accounted for
26.3% of overall expenditure (up from 21.4% a year earlier) and general services for 20.7%
(up from 20.2%).
FUNCTIONAL BREAKDOWN OF STATE BUDGET EXPENDITURE EXCLUSIVE OF DEBT
                               2008                     2009               Variation in %
    Description
                      In MTD    In % of total  In MTD    In % of total 2008/2007 2009/2008
 General services      2,584.9       20.2       2,940.6       20.7          8.9        13.8
 Economic services     2,737.3       21.4       3,722.9       26.3        16.8         36.0
  of which : capital
  expenditure          2,217.5       17.3       3,142.3       22.2        20.5         41.7
 Social services       7,469.7       58.4       7,510.7       53.0        15.9          0.5
        Total        12,791.9       100.0     14,174.2       100.0        14.6         10.8

The drop in the share of social services was due to a lower level of outlays for equalisation
(1,430 MTD vs. about 2,036 MTD in 2008) as well as a sizeable increase in capital
expenditure for economic services, the share of which was up by 4.9 percentage points.

                                              186
1. OPERATING EXPENDITURE
Operating expenditure exclusive of equalisation for commodities, fuel and transport went up in
2009 by 9.8% vs. 9.1% in 2008.
Higher expenditure involved in particular salaries and wages (+9.3%), as per the second portion
of the wage increase negotiated in the framework of the 2008-2010 three year programme, and
service means (+14.9%) following achievement of certain components of the recovery
programme adopted in the framework of the supplementary finance law for 2009.
OPERATING EXPENDITURE EXCLUSIVE OF EQUALISATION (GENERAL EQUALISATION FUND,
FUEL AND TRANSPORT)                                                           (In MTD)
                                                  2009             Variation in %
      Description        2007    2008
                                         S.F.L.        Actual  2008/2007 2009/2008
 Wages and salaries      5,327.5 5,761.4  6,326.1      6,298.7     8.1        9.3
 Means of services         636.4   724.0    733.6        832.2    13.8       14.9
 Interventions exclusive
 of equalisation           658.3   742.7    908.3        803.9    12.8        8.2
              Total      6,622.2 7,228.1  7,968.0      7,934.8     9.1        9.8

Equalisation expenditure posted 29.8% drop after increasing by 58.8% in 2008, due mainly to
falling prices for relevant imported products.
As for subsidised consumer commodities, lower prices on the world market (especially for
cereals) led to a 23.7% reduction in equalisation outlays, which came to some 800 MTD, down
from 1,048 MTD in 2008.
The same trend held for equalisation expenditure for fuel, dropping by 46.7% to 430 MTD
(compared to 806 MTD a year earlier) in line with the decrease in oil prices on the international
market with an annual average of some $61.5 per barrel of Brent, compared to more than
$97 in 2008.
2009 was marked by adoption of a mechanism to adjust domestic selling prices for oil products,
which takes into account price trends for crude oil on the international market on the one hand
and the need to maintain the country’s overall balance on the other. This mechanism was
activated on 16 January 2009, reducing prices by some 5% following a quarterly average for
world crude prices that was $10 per barrel lower than the balance price. On the other hand,
equalisation for transport went up by some 18 MTD or 9.8% compared to the 2008 figure of
some 182 MTD.
TRENDS IN EQUALISATION EXPENDITURE                                                       (In MDT)
                                                           2009               Variation in %
          Description              2007      2008
                                                      S.F.L. Actual       2008/2007 2009/2008
General equalisation fund (CGC)     668.0   1,048.0     800.0     800.0     56.9        -23.7
Fuel                                450.0     806.0     430.0     430.0     79.1        -46.7
Transport                           164.3     182.2     200.0     200.0     10.9          9.8
                Total             1,282.3   2,036.2   1,430.0   1,430.0     58.8        -29.8

Functional breakdown of operating expenses was marked by a lower share for social services
(66.8% of total vs. 70% in 2008), due for the most part to the drop in equalisation outlays
(1,430 MTD vs. 2,036 MTD in 2008). If equalisation is excluded, this share comes to the same
approximately 61% level as in 2008.

                                               187
FUNCTIONAL BREAKDOWN OF OPERATING EXPENDITURE
                          2008             2009                                                 Variation in %
      Description
                                     In MTD      Share in %       In MTD       Share in %   2008/2007 2009/2008
    General services                 2,246.3         24.3         2,529.8          27.0         9.5         12.6
    Economic services                  519.8          5.6           580.6           6.2         3.3         11.7
    Social services                  6,498.2         70.1         6,254.4          66.8        21.5          -3.8
                  Total              9,264.3        100.0         9,364.8        100.0         17.2           1.1

2. CAPITAL EXPENDITURE
Reflecting the greater intervention of budgetary policy in support of economic recovery and to
stand up to the impact of the world financial crisis, capital expenditure (including the granting of
loans) went up at a faster pace in 2009 (36.3% vs. 8.2% a year earlier) to about 4,809 MTD.
CAPITAL EXPENDITURE                                                                                         (In MTD)
                                                                           2009                 Variation in %
               Description                     2007     2008
                                                                    S.F.L.     Actual       2008/2007 2009/2008
    Direct investment                           960.0   1,056.2     1,252.7       1,276.1      10.0        20.8
    Public financing                            838.3     967.7     1,444.21      1,317.8      15.4        36.2
       of which : ETAP investment                 176       200         175           200      13.6         0.0
    Direct payments on external
    resources                                   695.5    742.4        863.9         815.0       6.7         9.8
     -State direct investment                   537.5    574.9        763.9         689.2       7.0        19.9
     -Loans onlended to public
      enterprises                            158.0        167.5      100.0          125.8       6.0       -24.9
    Treasury funds                           457.9        716.3      629.2          730.5      56.4         2.0
     - Special funds                         448.0        704.7      629.2          694.3      57.3        -1.5
     - Contingency funds                       9.9         11.6          0           36.2      17.2       212.1
    Advances and net loans of Treasury       309.9         45.0          0          670.0     -85.5     1,388.9
                     Total                 3,261.6      3,527.6      4,190.0      4,809.4       8.2        36.3

While onlended external loans to public enterprises dipped by 24.9%, other categories of
expenditure rose, especially direct investment, which went up by more than 20% vs. 10% in 2008
to about 1,276 MTD. This is also the case for public financing, which posted a 36.2% increase
vs. 15.4% a year earlier, bringing the total to some 1,318 MTD.
Net Treasury advances and loans soared, up from 45 MTD in 2008 to 670 MTD in 2009. This
increase was attributable to granting of exceptional cash advances in the amount of 630 MTD to
a number of public structures, with 300 MTD going to the cereals Board, 100 MTD to the
Tunisian electricity and gas company STEG, and 50 MTD to the national oil Board. This
measure will help reduce the level of expenditure in 2010 and thus narrow the budget deficit.
Functional breakdown of capital expenditure shows a high share for the economic aspect of
expenditure, which accounted for 65.3% of total vs. 62.9% in 2008.
FUNCTIONAL BREAKDOWN OF CAPITAL EXPENDITURE
                                               2008                         2009                Variation in %
           Description               In MTD       Share in %      In MTD       Share in %   2008/2007 2009/2008
    General services                   338.6          9.6           410.8          8.6          4.0         21.3
    Economic services                2,217.5         62.9         3,142.3         65.3         20.5         41.7
    Social services                    971.5         27.5         1,256.3         26.1        -11.2         29.3
                    Total            3,527.6        100.0         4,809.4        100.0          8.2         36.3



1
    Including non allocated loans.
                                                          188
3. DEBT RETIREMENT
Outlays to redeem public debt (principal and interest) dropped slightly (1.1%) in 2009. These
outlays were marked by an increase of some 349 MTD in redemption of principal on external
public debt after a block settlement on 6 August 2009 on a debenture loan on the international
financial market in the amount of 427 MTD. This increase was mitigated by a decrease in
redemption of the principal on domestic public debt because of reimbursement of 52 week
Treasury bonds in the amount of 123 MTD in 2009, down from almost 547 MTD in 2008.
DEBT RETIREMENT                                                           (In MTD unless otherwise indicated)
                                                             2009                   Variation in %
   Description           2007         2008
                                                  S.F.L.            Actual      2008/2007    2009/2008
 Domestic debt          1,877.8      1,858.3       1,975.0          1,434.2          -1.0         -22.8
 Principal              1,295.6      1,295.2       1,335.0            873.5           0.0         -32.6
 Interests                582.2        563.1         640.0            560.7          -3.3          -0.4
 External debt          2,043.6      1,418.3       1,830.0          1,807.0         -30.6          27.4
 Principal              1,443.9        838.9       1,215.0          1,187.6         -41.9          41.6
 of which :
 Early repayment          341.3            0             0                0        -100.0
 Interests                599.7        579.4         615.0            619.4          -3.4           6.9
 Total                  3,921.4      3,276.6       3,805.0          3,241.2         -16.4          -1.1
 Principal              2,739.5      2,134.1       2,550.0          2,061.1         -22.1          -3.4
 Interests              1,181.9      1,142.5       1,255.0          1,180.1          -3.3           3.3

C. THE BUDGET DEFICIT AND ITS FINANCING
Under pressure from an unfavourable international environment that led to slowing economic
growth, the budget deficit exclusive of income from privatisation and external grants went up
in 2009 to about 1,771 MTD or 3% of GDP vs. almost 559 MTD and 1% in 2008. Still, this
was less than the 2,022 MTD deficit (3.4% of GDP) envisaged in the supplementary finance
law. With no proceeds from privatisation and taking into account external grants, the budget
deficit in 2009 came to about 1,589 MTD or 2.7% of GDP vs. 220 MTD and 0.4% a year
earlier and 3.2% projected.
BALANCE OF STATE BUDGET AND FINANCING OF THE DEFICIT
                                                                        (In MTD unless otherwise indicated)
                                                                    2009               Variation in %
          Description                 2007       2008
                                                              S.F.L.    Actual      2008/2007 2009/2008
Core resources exclusive of
privatisation and grants             11,015.0   13,375.9     12,821.0   13,583.0       21.4          1.5
Expenditure exclusive of principal   12,348.0   13,934.4     14,843.0   15,354.3       12.8         10.2
Budget deficit exclusive of
privatisation and grants              1,333.0     558.5       2,022.0    1,771.3
In % of GDP                               2.7       1.0           3.4        3.0
Privatisation and grants                428.9     338.4         170.0      182.6
Budget deficit exclusive of
privatisation and grants               904.1      220.1       1,852.0    1,588.7
In % of GDP                              1.8        0.4           3.2        2.7

Given the turmoil and insufficient liquidity that characterised international capital markets,
financing of the budget deficit was entirely covered by domestic funding. These resources,
net of redemption of debt principal, came to about 1,613 MTD in 2009 vs. 89 MTD in 2008,
most of which was made up of cash resources. Net external financing was nearly -25 MTD,
although it had been about +131 MTD in 2008. This was due to considerable growth in
drawings on external loans (+19.9% vs. -4.5% a year earlier), accompanied by a sharp
increase in redemption of principal (+41.6%).

                                                   189
FINANCING THE BUDGET DEFICIT
                                         2007                     2008                       2009
        Description                          In %                     In %                       In %
                              In MTD                    In MTD                    In MTD
                                            of total                 of total                   of total
 Net domestic financing        1,332.6           99.9      89.2            16.0    1,613.3            91.1
  Net domestic borrowing         126.6            9.5    -624.6          -111.8      150.9             8.5
    * Domestic borrowed
      resources                1,422.2          106.7    670.6           120.1     1,024.4            57.8
    * Redemption of debt
      principal (in -)         1,295.6           97.2   1,295.2          231.9      873.5             49.3
  Drawing on the Treasury
    resources                  1,206.0           90.4    713.8           127.8     1,462.4            82.6
 Net external financing         -428.5          -32.1    130.9            23.4       -24.6            -1.4
    * External borrowed
      resources                1,015.4           76.2    969.8           173.6     1,163.0            65.7
    * Redemption of debt
      principal (in -)         1,443.9          108.3    838.9           150.2     1,187.6            67.1
 Privatisation and grants        428.9           32.2    338.4            60.6       182.6            10.3
              Total            1,333.0          100.0    558.5           100.0     1,771.3           100.0

D. TRENDS IN THE OUTSTANDING BALANCE OF PUBLIC DEBT
The overall outstanding balance of domestic and external public debt came to about 25,190 MTD
in 2009, 42.9% of GDP vs. 43.3% a year earlier, a drop of 0.4 percentage point. Dynamic
management of public debt helped reduce the share of external public debt, posting 58.4% vs.
60.9% in 2008 and consequently lessening the impact of foreign exchange risk.
THE OUTSTANDING BALANCE OF PUBLIC DEBT
                           2007                 2008                                     2009
      Description                In %                 In %                                       In %
                  In MTD                 In MTD                                   In MTD
                                of total             of total                                   of total
 External debt    13,300.4         58.3  14,559.9      60.9                       14,715.7            58.4
  In % of GDP         26.7                   26.3                                     25.1
 Domestic debt     9,528.8         41.7   9,366.6      39.1                       10,474.3            41.6
  In % of GDP         19.1                   17.0                                     17.8
 Total            22,829.2        100.0  23,926.5     100.0                       25,190.0           100.0
  In % of GDP         45.8                   43.3                                     42.9

The outstanding balance of external public debt was marked in 2009 by :
    x drop in the share of loans on the international financial market (37.6% of the overall
outstanding balance of external public debt vs. 41% in 2008). This was due to the absence of
recourse to loans on this market in 2008 and 2009 and by repayment of 225 million euro for
debenture loans on this market in 2009, and
    x higher share for the US dollar in the overall outstanding balance by foreign currency, at
14.1% vs. 13.1% in 2008, following the above-mentioned repayment on the international financial
market.
STRUCTURE OF EXTERNAL PUBLIC DEBT BY CURRENCY                                                         (In %)
            Currency            2007                                2008                     2009
 Euro                            59.5                                57.3                     56.9
 USA dollar                      14.8                                13.1                     14.1
 Japanese Yen                    18.1                                22.2                     21.5
 Others                           7.6                                 7.4                      7.5
                Total           100.0                               100.0                    100.0



                                                 190
Trends in the situation of Treasury bonds were marked in 2009 by :
      x issue of an amount of some 1,024 MTD (vs. 671 MTD in 2008), of which 783 in bonds
equivalent to Treasury bonds and 241 MTD in 52 week Treasury bonds,
      x reimbursement of 835 MTD in bonds equivalent to Treasury bonds (712 MTD) and 52
week Treasury bonds (123 MTD),
      x an increase in the outstanding balance of Treasury bonds in the amount of 189 MTD
(118 MTD in 52 week Treasury bonds and 71 MTD in bonds equivalent to Treasury bonds
BTA), and
      x a 0.65 percentage point increase (from 5.962% in 2008 to 6.612% in 2009) in the
weighted average interest rate.
STRUCTURE OF THE OUTSTANDING BALANCE OF TREASURY BONDS BY MATURITY1
                                                                 (Outstanding in thousand TD; WAR2 in %)
         Description              2005           2006           2007           2008           2009
  52 weeks    Outstanding        463,500        486,800       543,550        122,700         240,950
                 WAR              5.1600          5.161         5.450          5.274           4.243
   2 years    Outstanding        208,200                                                      65,500
                 WAR              5.3370                                                       4.292
   3 years    Outstanding        533,900        653,950
                 WAR              5.5410          5.484
   4 years    Outstanding                                                                     78,400
                 WAR                                                                           4.358
   5 years    Outstanding        612,800        630,400          630,400
                 WAR              6.3070          6.277            6.277
   6 years    Outstanding                       260,800          417,300        423,300       423,300
                 WAR                              5.867            6.000          5.617         6.003
   7 years    Outstanding                        96,400          360,800        521,700       657,700
                 WAR                              6.421            6.514          5.964         6.055
  10 years    Outstanding        2,559,329    3,056,984       3,447,909       3,868,859     3,551,280
                 WAR                6.9020        6.735            6.742          6.367         6.622
  12 years    Outstanding          888,900      888,900          888,900        888,900       888,900
                 WAR                8.2350        8.235            8.235          8.235         8.235
  15 years    Outstanding                                        122,700        147,100       256,200
                 WAR                                               7.183          6.816         6.792
             Outstanding         5,266,629      6,074,234     6,411,559       5,972,559     6,162,230
   Total         WAR                6.7040         6.6039          5.655          5.962         6.612
1
  Treasury bonds at the end of 2009 were made up of 52 week Treasury bonds and Treasury bonds with a
  duration varying between 2 and 15 years, i.e. bonds equivalent to Treasury bonds (BTA) and zero coupon
  Treasury bonds BTZc.
2
  WAR = weighted average interest rate.




                                                  191
 MONETARY DEVELOPMENT

AND DISTRIBUTION OF CREDIT
                       I. MAIN ECONOMIC, MONETARY AND FINANCIAL
                                        REGULATING MEASURES

In 2009 public authorities pursued their policy of support to economic activity and renewed
growth. Measures taken in this area target investment promotion and stimulation of both
domestic and foreign demand. These measures were accompanied on the financial side by
conduct of accommodating monetary policy, revised regulations for non resident financial
institutions’ activity, greater activity on the capital market and ongoing policy for external
financial liberalization leading to total convertibility of the dinar by 2014.
Moreover, measures of a social nature and others targeting development of an economy with
high technological content and capacity to create jobs (especially for young graduates of
higher education) were taken during the year, in application of the President’s electoral
programme.
A. MEASURES CONCERNING THE FINANCIAL SYSTEM
Measures taken in this area concern essentially conduct of monetary policy, supervision of
services rendered by non residents by promulgation of a code governing such services,
revision of regulations to fight terrorism and money laundering, strengthening of financial
market activity, and ongoing easing of foreign exchange and foreign trade regulations.
1. CONDUCT OF MONETARY POLICY
Along with measures to support and accommodate economic activity introduced by the
State, the Central Bank of Tunisia (BCT) eased monetary policy in 2009 by making additional
resources available to productive sectors so as to finance investment while reducing costs.
The Issuing Institution lowered on 17 February 2009 its key rate from 5.25% to 4.5% in the
wake of lower inflationary pressure in the first quarter of 2009 and in order to back up the
economic activity mainly, companies having encountered difficulties in the wake of lower
demand from abroad. But in light of persistent excess liquidity on the money market since
March 2008 and throughout 2009 and early 2010, the central bank of Tunisia decided in
February 2010 to increase the reserve requirement rate applied to sight deposits, other sums
due to clients, certificates of deposit with initial duration of less than three months, and
insufficient respect of the liquidity ratio for the month under consideration. The rate was
insufficient from 7.5% to 10%1 starting 1 March 2010, while maintaining unchanged the rate
applied to special savings accounts, other savings accounts, forward accounts, cash
vouchers and other financial products the initial duration of which is equal to or more than
three months but less than 24 months.
With excess liquidity so persistent despite the above mentioned increase and in order to
relieve inflationary pressure, the central bank of Tunisia decided to raise the reserve
requirement rate starting 1 May 2010 to 12.5% for sight deposits, other sums due to clients,
certificates of deposit with an initial duration of less than three months and insufficient
respect of the liquidity ratio for the month under consideration; and to 1.5% for the
outstanding balance of certificates of deposit, forward accounts, cash vouchers and other

1
    Cf. Central Bank of Tunisia circular to banks n°2010-05 of 25 February 2010.
                                                        194
financial products the initial duration of which is equal to or more than three months and less
than 24 months, as well as for the outstanding balance of savings accounts (other than
special savings accounts) with a contractual savings duration equal to or more than three
months but less than 24 months.
Additional deposits made by banks at the central bank of Tunisia to meet the 2.5% increase
in the reserve requirement rate on the outstanding balance of sight deposits, other sums due
to clients, certificates of deposit the initial duration of which is less than three months and
insufficient respect of the liquidity ratio for the month under consideration are now
remunerated at the rate of 1% per annum.1
2. PROMULGATION OF THE CODE TO PROVIDE FINANCIAL SERVICES TO NON
RESIDENTS
In the framework of national policy to increase private initiative to finance and develop the
Tunisian economy and in order to make Tunisia a leading regional financial hub, the
President of the Republic on the 21st anniversary of the new era decided revision of the law
n°85-108 concerning incentives to financial and banking institutions working mainly with non
residents, in order to modernise and be coherent with onshore banking legislation as well as
best practices and international banking and financial norms, which will help attract world
renowned financial institutions2.
This code governs the rendering of financial services to non residents (as well as certain
operations related to them) by non resident lending institutions, investment funds, portfolio
management companies and stockbrokers, with coverage of the various stages of their
activity.
This code has seven parts :
The first concerns introduction of a complete set of conditions for setting up and carrying out
activity in the area of financial services for non residents. Authorisation remains mandatory
(along the lines of what was envisaged in 1985 legislation), subjecting access to the
profession to special conditions, given the complexity of financial operations and the required
high level of professional skill as well as relevant financial, technical, logistic and manpower
means. These conditions, provided for in onshore banking legislation, were confirmed by this
code, with introduction of certain new features and more favourable conditions in order to
save investors’ interest. These new features involve for the most part :
   - the possibility of limiting authorisation to the exercise of certain operations defined by the
nature of the applicant or that link it to respecting the commitments subscribed to by the
applicant, or that involve special conditions seeking to maintain balance in the financial
structure of the service provider,
   - effective orientation of the applicant’s activity must be ensured by at least two persons,
who along with the person in charge of internal audit must be authorised by the relevant
authority,

1
 Cf. Central Bank of Tunisia circular to banks n°2010-07 of 30 April 2010.
2
 Cf. Law n°2009-64 of 12 August 2009 published in the official journal of the Tunisian Republic JORT n°65 of
14 August 2009.
                                                      195
   - a three month deadline for granting (or refusing) authorisation, starting on the date of
submission of the request for authorisation along with all required documentation (compared
to the four months dictated for onshore banking and no time frame specified in the 1985
legislation), and
  - establishment of minimum capital by category of service provider, this being the
counterpart in convertible foreign currencies of 25 MTD for non resident banks, 10 MTD for
non resident financial institutions, 7.5 MTD for non resident investment companies, and
250,000 dinars for non resident portfolio management companies.
A time frame of two years from the date of publication of this code is granted to non resident
banks set up in the framework of the 1985 law to meet the requirement for minimum capital.
The second part concerns the establishment of rules of good governance, which favour the
emergence of an enabling framework for healthy competition founded on greater
transparency and dissemination of financial information. In effect, like resident lending
institutions, non resident financial service providers must :
   - set up an appropriate internal audit system that guarantees ongoing assessment of
internal procedures as well as the determination, monitoring and mastery of risks linked to
their activity,
   - introduce a system that monitors conformity (especially to determine and assess the
risks of non conformity to prevailing legislation and regulations) to the rules of proper
operations in the profession and to best practices,
   - create a permanent internal audit committee, and
   - designate two external auditors (for non resident lending institutions that make public call
for savings).
The third part affirms the principle of universality in the exercise of offshore banking activity
with non residents, (through collection of funds whatever the duration and form) and the
granting of all forms of credit, making available to non resident clients both means of
payment and their management.
The code also provides more flexibility for offshore banking activity with residents in the area
of collection of deposits in dinars and use thereof for loans. In effect, non resident lending
institutions that act as banks have been authorised to receive resident funds regardless of
duration and form, as long as funds taken in do not exceed for each non resident bank the
amount of its long term loans granted in foreign currency to residents and the amount
subscribed to in foreign currency in the capital of resident companies, except for holdings in
the capital of lending institutions in the sense of law n°2001-65 concerning lending
institutions.
Resources in dinars taken in from residents are used for loans to finance productive
operations in Tunisia by residents in all sectors except consumer and real estate loans.
As for the fourth part, the code provides for a legal framework that is favourable for setting
up international financial companies and for better management of services provided on the
capital market, by creating new companies that can meet the needs of non resident
investors, i.e. expert funds. These are investment vehicles specific to certain categories of
                                              196
non resident investors, according to their expertise and volume of investment. Expert funds
are mutual funds investing in securities that benefit from less stringent investment rules
«OPCVM ARIA». These structures are set up as open end mutual investment companies
«SICAV ARIA» or mutual investment funds with less stringent investment rules «FCP ARIA»,
authorised by the capital market council (CMF) and subject to a certain number of conditions
that allow the relevant authorities to oversee transactions and funds invested on the capital
market.
The code provides also for the creation of a new offshore compartment on the Tunis stock
exchange, which will decide on admission and introduction of financial instruments and
options as well as their writing off and negotiability on this compartment.
The fifth part involves definition of the authorities that will authorise and oversee the
provision of financial services to non residents. Non resident loan institutions are subject to
supervision by the central bank of Tunisia, its disciplinary power and the commission of
financial services instituted by the code governing provision of financial services to non
residents. Non resident investment service providers authorized to act as non resident
investment companies or non resident portfolio management companies along with the staff
working under their authority are subject to supervision by the capital market council, its
disciplinary power and the financial services commission.
Furthermore, non resident investment service providers authorised to act as banks are
subject to supervision by the central bank of Tunisia and the capital market council as per
conditions set down in an agreement signed between the two parties.
The sixth part involves adoption of a single universal text governing the provision of all
financial services to non residents, seeking to offer foreign investors a clear understanding of
the legal framework that governs such activity. This code also introduced certain new
elements on the market that relate to ethical rules and the protection of depositors and
borrowers, notably by creating a fund to guarantee client deposits at non resident lending
institutions as well as a guarantee fund for investors in financial instruments. Furthermore, a
professional association of non resident financial service providers was set up, the main
mandate of which is to ensure the credibility and reliability of Tunis as a financial hub. Non
resident financial service providers must, as per the conditions set by the relevant authority,
meet management norms meant to guarantee their liquidity and solvency as well as balance
in their financial structures.
Non resident lending institutions must also respect the rules for management and the
prudential norms set by the central bank of Tunisia, notably those relating to:
 - the reserve requirement for deposits in dinars,
 - liquidity ratios,
 - financing granted by non resident lending institutions to their affiliates,
 - risks in general,
 - use of capital stock equity,
 - the solvency ratio as a ratio of capital stock equity compared to commitments, and
 - ratios of capital stock equity compared to the financing of each debtor.
                                               197
The seventh part is devoted to incentives in the areas of taxes, customs, foreign exchange
and social security for foreign staff as well as extension of the system prescribed by the code
for certain activities (article 28 of law n°85-108). Thus incentives in the area of foreign
exchange as per law n°85-108 were extended to all providers of financial services. In effect :
    - there is no obligation to repatriate income or proceeds abroad and there is total freedom
of foreign exchange for operations with non residents,
   - income earned by non resident lending institutions through services to residents
financed from their resources in dinars can be transferred after securing authorisation from
the central bank of Tunisia.
For services provided to residents as well as proceeds and profits generated by these
services are subject to tax legislation into force.
But the following holds for operations with non residents :
   - non resident lending institutions in activity prior to 1 January 2011 are exonerated from
taxes on profits and any other tax or levy of the same nature (up until 31 December 2010),
   - profits from operations carried out by non resident financial service providers starting
1 January 2011 are subject to corporate tax at the rate of 10%.
As for customs, the incentives provided for by law n°85-108 have also been reviewed,
notably those relating to suspension of duty and taxes on imports and suspension of taxes
on turnover relating to material and equipment acquired locally.
As for foreign staff, recruitment of supervisory and management staff who are foreign
nationals now requires only simple notification to the ministry of vocational training and
employment and to the central bank of Tunisia (former article 19 of law n°85-108), but this is
henceforth subject to the terms of article 258 of the labour code, which stipulates that
«foreigners can be recruited only if there are no Tunisians qualified to do the job». This law
also authorizes the capital market council to conclude with national regulatory authorities in
the banking and insurance sector and its foreign counterparts cooperative agreements
pertaining to more effective supervision of non resident investment service providers, with a
view to keeping up the good name of Tunis as a financial hub.
3. ANTI-TERRORISM MEASURES AND CRACKING DOWN ON MONEY LAUNDERING
a. Modification of certain terms of legislation into force
Amendment of law n°2003-75 of 10 December 2003 governing support to international efforts
to fight terrorism and crack down on money laundering by law n°2009-65 of 12 August 2009
is part of a firm commitment to support the efforts of the international community in this area.
This represents a new step on the road to transparent markets and financial transactions as
well as strengthening of mechanisms to prevent abuses in the financial system. Concretely,
amendment of this law deals, mainly, with the following aspects1:




1
  Cf. Law n°2009-65 of 12 August 2009 published in the official journal of the Tunisian Republic n°65 of
14 August 2009.
                                                  198
(i) Definition of those subject to the obligations of the law
In effect, modification of the law further clarifies definition of those subject to the obligation to
be vigilant by :
     - limiting work carried out by professionals to financial operations and transactions for their
clients that involve the purchase or sale of real estate or of businesses as a going concern,
management of capital and accounts, organisation of inputs to set up businesses and other
corporate entities, their use or management,
     - adding preparatory operations to implementation, advisory and supervision
operations,
     - extending obligations under the law to merchants of jewellery, precious stones and all
other precious objects and to casino directors for transactions with their clients, the value of
which is equal to or higher than the figures set by the Minister of Finance bylaw of
10 September 2004 as modified by bylaw of 2 December 2009, which sets the amounts as
foreseen in articles 70, 74 and 76 of law n°2003-75 of 10 December 2003.
(ii) Measures of vigilance with regard to clients
The new version of the law lists in sufficient detail the means of vigilance to be used when :
     - the entities subject to this law enter into business relations and carry out occasional
transactions, the value of which is equal to or more than the amounts set by the Minister of
Finance bylaw of 10 September 2004 (mentioned above) or in the form of electronic
transfers,
     - there are suspicions of money laundering or financing of terrorism,
     - there are doubts about the veracity or pertinence of previously obtained data to identify a
client.
The new version of the law also distinguishes between :
    - standard surveillance measures, notably verification and updating of the client’s
identity (habitual or occasional), either private individual or corporate entity and the
beneficiary; data collection on the object and the nature of the relation; ongoing surveillance
regarding them; and the case of recourse to third parties to carry out surveillance measures,
and
     - special surveillance measures that concern relations considered high risk, notably
business relations with affiliates and companies for which subjected entities hold majority
shares and are located abroad, individuals who have held or who currently hold high public
office in a foreign country, those close to them, or people who have relations with them,
cross-border banking correspondents, people living in countries that do not or insufficiently
apply international norms in the area of anti money laundering measures and financing of
terrorism, or business relations that introduce new technologies and those that do not imply
the physical presence of the parties.
(iii) Rules governing a declaration of suspicion
Modification of law n°2003-75 of 10 December 2003 concerned mainly the terms that apply
to a declaration of suspicion. This is a matter of :
  - limiting the obligation to declare to suspicious operations and transactions,

                                                199
    - extending the obligation to declare to attempted operations or transactions that are suspicious,
    - making the declaration after carrying out the operation, and
    - eliminating immediate suspension.
From now on, unusual operations and transactions will be subject to a regime other than that
governing suspicious operations, in line with international standards. In effect, those
concerned must :
    - review, insofar as possible, the framework in which these operations or transactions
are carried out, as well as their goal,
    - record the results of the review in writing, and
    - make the results available to supervisory authorities and auditors.
(iv) Tunisian commission of financial analyses (CTAF)
Modification of law n°2003-75 of 10 December 2003 added two members to the make-up of
the CTAF : an expert from the national postal Board and another from the general insurance
Committee. It should be kept in mind that this commission, chaired by the governor of the
central bank of Tunisia, includes a magistrate and experts from the ministry of finance, the
ministry of interior and local development, the directorate general of customs, the capital
market council CMF, and another specialist in anti-financial infraction measures.
Furthermore, modification of the law has made CTAF autonomous, apparent essentially in
the independence of its members. In effect, they are designated by decree for a mandate of
three years. They are independent of their administrations when on CTAF business.
Moreover, following elimination of immediate suspension of the operation or transaction that
is the object of a declaration of suspicion, the time frame of 48 hours (renewable just once),
granted to the CTAF to complete its work has been eliminated. From now on, CTAF must
complete its work in the shortest possible time. Still, when it orders freezing of the funds that
are the object of a declaration of suspicion in line with article 87, CTAF must complete its
work within five days.
b. Setting and revising the amounts foreseen for surveillance measures in
the framework of cracking down on money laundering
Following the recent amendments to anti money laundering legislation, minimum thresholds
for which entities (as defined in this legislation) must take the required surveillance measures
were set or modified as follows1:
     ¾ 10,000 dinars during implementation of occasional financial transactions,
     ¾ 3,000 dinars vs. 5,000 previously for financial operations that were the object of a
single life insurance premium,
     ¾ 1,000 dinars vs. 2,000 dinars for financial operations that are the object of periodic life
insurance premiums,
     ¾ 15,000 dinars for transactions carried out on precious metals, jewellery, precious
stones, and all other precious objects,
     ¾ 3,000 dinars for transactions carried out in casinos.

1
 Cf. Minister of Finance bylaw of 2 December 2009 published in the official journal of the Tunisian Republic
JORT n°97 of 4 December 2009.
                                                    200
It should be specified that these entities are banking or non banking financial institutions and
any entity that in the exercise of its profession :
    - prepares or carries out for clients financial operations or transactions for purchase or
sale of real estate or of businesses as a going concern,
     - manages client capital and accounts,
   - organises inputs for the creation of companies and other legal entities, uses them or
manages them,
     - supervises these operations or transactions or gives advice about them.
To these are added merchants dealing in jewellery, precious stones and all other precious
objects as well as casino directors.
B. CONSOLIDATION OF ACTIVITY ON THE CAPITAL MARKET
Measures taken in this framework concerned mainly protecting the interests of investors and
consolidating the role of the financial market council in the area of supervision to guarantee
more secure financial relations.
1. CONSTITUTION OF A GUARANTEE FUND FOR CLIENTS ON THE MARKET
FOR STOCKS AND FINANCIAL PRODUCTS
In application of article 62 of law n°94-117 of 14 November 1994, a Minister of Finance bylaw
set conditions to create, organise and run a guarantee fund for clients on the stock and
financial product market. To this end, stockbrokers at an extraordinary general assembly on
6 May 2009 decided to set up a guarantee fund for clients on the stock and financial products
market. This fund is managed by the Tunis stock exchange (BVMT), with the goal of
guaranteeing clients against non commercial risks from default by a stockbroker. The fund
intervenes after the college of the capital market council gives its opinion about this default1.
This fund’s resources are made up as follows:
    - 5% of the amount of commissions collected by the Tunis stock exchange on stock
transactions on the market,
     -   an annual contribution in the amount of 1,000 dinars paid by each stockbroker, and
     -   the proceeds from investment of the fund’s resources.
The guarantee of this fund cannot exceed an amount equivalent to two thirds of its available
resources. The amount to be served is distributed between the clients that the BVMT has
decided to compensate at prorate of the rights of each client in the mass of claims eligible for
such compensation, up to 30,000 dinars per client regardless of the number of its accounts,
with total amounts paid not exceeding 90% of the amount concerned by compensation for
each client.




1
 Cf. Ministrer of Finance bylaw dated 1 April 2009 published in the official journal of the Tunisian Republic JORT
n°28 of 7 April 2009 and Tunis Stock Exchange communiqué of 8 May 2009.
                                                      201
2. STRENGTHENING THE ROLE OF THE CAPITAL MARKET COUNCIL (CMF)
With a view to strengthening the role of the financial market council in the exercise of its
mandate and to enhancing the security of financial relations, it was decided that authorisation
to undertake portfolio management activity on behalf of a third party can henceforth be
granted solely on the basis of a work plan and of human and material means at the
management company, to exercise in one or more of the following areas1 :
    - individual management,
    - management of open end investment companies or mutual funds investing in securities, and
    - management of capital risk mutual investment funds and start up funds.
It should be recalled that in the past this authorisation was given only on the basis of a
request submitted by the founders of the management company to the capital market council
and accompanied by documentation as determined by this council.
Furthermore, the list of reasons for which a person would be excluded from directing a stock
portfolio management company on behalf of a third party or be a member of its executive
board or directorship or supervisory board was expanded to include infraction of legislative
and regulatory texts relating to crack down on money laundering.
On another front, a stock portfolio management company intervening on behalf of a third
party should not hold either client stock accounts or cash. These holdings should
be deposited, as the client chooses, at one or more banks, in line with law n°2001-65 of
10 July 2001. The executive board or the supervisory board of the management company
should designate a person in charge of conformity and internal audit, according to the
conditions set by capital market council regulations.
3. FINANCIAL MARKET ADHESION TO THE MULTILATERAL AGREEMENT
OF THE INTERNATIONAL ORGANISATION FOR SECURITIES COMMISSIONS
Toward the end of 2009, the international organisation for securities commissions accepted
the capital market council’s application for membership in the multilateral agreement of this
institution, which involves consultation, cooperation and exchange of information.
Adhesion in December 2009 of the capital market council to the international organisation for
securities commissions’ multilateral agreement will allow it to access essential information to
ensure better control of its operations, notably those relating to financial products, particularly
following promulgation of the code governing provision of financial services to non residents,
especially since recent events have shown the devastating impact that infractions and
excesses on the capital markets and economies in general can have.
It should be noted that the international organisation for securities commissions in general
seeks to introduce strict international standards to strengthen effectiveness and transparency
of capital markets, to protect investments and facilitate cooperation between regulatory
authorities in order to crack down on infractions and weaknesses in the financial field. This
agreement has been signed by 52 States including the United States, France, Germany,
Australia, Italy and Hong Kong.


1
 Cf. Decree n°2009-1502 of 18 May 2009 published in the official journal of the Tunisian Republic JORT n°41 of
22 May 2009.
                                                    202
4. GREATER POWER OF INFORMATION FOR THE CAPITAL MARKET COUNCIL
OVER COMPANIES THAT MAKE PUBLIC CALL FOR SAVINGS
In order to ensure better security in financial relations, better quality information and
protection of corporate and stockholder interests, and in application of the recent dispositions
of the commercial companies code (notably article 3 relating to publication of any
compromise between associates), it has been decided to boost the information powers of the
capital market council by obliging associates who have entered into pacts among themselves
to publish them in the official bulletin of the capital market council and that of the Tunis stock
exchange within five days of stock market activity starting from transmission of these pacts to
the capital market council. They must be published on the company’s website if there is such
a site and they must also be included in the annual report on management of the company
throughout the entire period that the pact is into force1.
The information to be published must include at a minimum the identity of the parties that
have signed the pact, identification of the company whose shares are the object of the pact,
the date the pact is finalised, and the duration of the parties’ commitments along with, as
applicable, the starting date of the pact and the percentage of capital and voting rights held
by each contractor at the date of signature of the pact as well as the number of shares held
by each contractor and that confer a right to participate in capital. Publication is also
mandatory when such pacts between associates are terminated.
5. HARMONISATION OF THE TAX REGIME FOR PROVISIONS ALONG WITH
THE NATURE OF FINANCIAL INSTITUTION ACTIVITY
With a view to harmonising the tax system relating to deductions for provisions as per the
specificities of financial institution activity, it was decided on the basis of article 35 of the
2010 finance law to totally deduct without limit in time provisions constituted for doubtful
claims and guarantees granted to clients by lending institutions and non resident banks.
Provisions constituted by venture capital investment companies for depreciation of stock and
corporate shares (which had been deductible at a rate of 50%) have now become entirely
deductible2.
C. GREATER CURRENT CONVERTIBILITY OF THE DINAR AND FLEXIBILITY
IN FOREIGN EXCHANGE AND FOREIGN TRADE REGULATIONS
In the framework of orientations that target total convertibility of the Tunisian dinar by 2014,
authorities have taken measures to increase the allocation for living expenses abroad for
tourism, studies or vocational training, to improve the operational conditions for «export-
profits» accounts, and to pursue paperless formalities for foreign trade.




1
  Cf. Minister of Finance bylaw of 16 October 2009 published in the official journal of the Tunisian Republic JORT
n°85 of 23 October 2009.
2
  Cf. Article 35 of law n°2009-71 of 21 December 2009 published in the official journal of the Tunisian Republic
JORT n°102 of 22 December 2009.
                                                      203
1. INCREASE IN THE ALLOCATION FOR LIVING EXPENSES ABROAD
FOR TOURISM, STUDIES AND VOCATIONAL TRAINING
With a view to maintaining purchasing power for residents during their travel abroad, a
decision was taken to increase the amount of the tourist allocation from 4,000 TD to 6,000 TD
annually. There was also an increase in the amounts that can be transferred by residents
pursuing studies or vocational training cycles abroad, with the installation allowance up from
2,000 TD to 3,000 TD per year or per training cycle and the monthly allocation for living
expenses up from 1,500 TD to 2,250 TD1.
2. BETTER OPERATING CONDITIONS FOR SPECIAL «EXPORT-PROFITS»
ACCOUNTS
In the framework of policy to promote exports and attract investment in activities linked to this
sector, regulations pertaining to special «export-profits» accounts have been reorganised.
These accounts were set up in 1996 for resident private individuals receiving profits from
their own activities of exporting of goods or services or from their holdings in the capital of
resident export companies. Improvements in this area consist of :
  - the possibility for eligible people to open this type of account in a foreign currency of their
choice, whereas previously these accounts could be opened only in convertible dinars,
   - an increase in the rate of deposit in these accounts from 15% to 20% of the amount of
profits coming from export operations carried out by the holder of the account and/or paid to
him or her by the companies in which he or she has holdings2.
3. PURSUIT OF PAPERLESS FORMALITIES FOR FOREIGN TRADE
In application of the policy to facilitate foreign trade procedures and formalities, a decision
was taken to admit operations to import the products needed for production by resident
companies that export their entire production to an integrated system of automated
processing of foreign trade formalities, whenever the customs posting is handled in the
framework of this system3.
D. MEASURES TO SUPPORT BUSINESSES
Action by the competent authorities in this framework was marked by ongoing State support
to economic companies, notably exporting companies, in order to carry out their activity
either by granting specific advantages or by means of tax incentives.
1. ONGOING IMPLEMENTATION OF TIMELY MEASURES TO SUPPORT BUSINES-
SES IN PURSUIT OF THEIR ACTIVITIES
Public authorities amended law n°2008-79 concerning timely measures to support economic
companies in pursuit of their activities, in anticipation of the continuing adverse impact of the
international financial crisis on national companies, despite the appearance of some signs of
recovery in developed economies around the world.
1
   Cf. Central bank of Tunisia circulars to Authorized Intermediaries n°2009-21 of 13 November 2009,
n°2009-22 and n°2009-23 of 18 November 2009.
2
  Cf. Decree n°2009-2075 of 8 July 2009 published in the official journal of the Tunisian Republic JORT n°55 of
10 July 2009 and Central Bank of Tunisia circular to Authorized Intermediaries n°2009-15 of 24 July 2009.
3
  Cf. Central Bank of Tunisia circular to Authorized Intermediaries n°2010-04 of 16 February 2010.
                                                     204
In effect, amendment of this law targets ongoing implementation of timely measures
extended to 30 June 2010, beyond the 31 December 2009 date initially set and the widening
of the field of eligibility for measures relating to claims that can benefit from these financial
measures and to companies concerned by social incentives1.
a. Claims eligible for financial measures
Claims eligible for financial measures are henceforth unpaid repayments that fell due or that
will fall due in the period 1 October 2008 through 30 June 2010 (set initially over the period
6 January 2009 through 5 July 2009, then 1 October 2008 through 31 December 2009).
Furthermore, these claims henceforth include overdrafts beyond the ceiling set by article 14
of central bank of Tunisia circular n°87-47 of 23 December 1987 recorded against this same
period. Moreover, in order to alleviate the repayment burden for companies, the time frame
for rescheduling has been extended from three to five years.
b. Companies eligible for social incentives
Social measures available under the above mentioned legislation that concern solely
companies that export their entire production (as defined in article 10 of the investment
incentives code) are now extended to companies located in economic activity parks and
those operating in the sectors covered by the investment incentives code that posted an
average of at least 50% of their turnover from exports for 2007 and 20082.
c. Other measures
With a view to supporting the activity of companies that export their entire production, the
ceiling for share of sales or provision of services that can be carried out on the local market
by the companies defined in article 10 of the investment incentives code as well as those
located in economic activity parks that work in the sectors covered by this code went up to
50% of turnover from export instead of 30% and 20% respectively. Furthermore, to
encourage banks to reschedule the debt of exporting companies as defined above, a line of
refinancing has been put in place by the State in the amount of 25 MTD, budgeted in the
2009 supplementary finance law and placed in a sub-account entitled “Conjunctural
mechanism for support to businesses’ refinancing account” opened at the central bank of
Tunisia in the account “Tunisian Government miscellaneous accounts”3. In this same context,
an amount of 5 MTD was budgeted under this same law for State assumption of bonus
interest rates on rescheduled loans to exporting companies held in the same account.




1
  Cf. Law n°2009-82 of 30 December 2009 published in the official journal of the Tunisian Republic JORT n°1 of
1 January 2010 and BCT circulars to Lending Institutions n°2009-13 of 15 July 2009 and n°2010-02 of 7 January 2010.
2
  Cf. Law n°2009-35 of 30 June 2009 published in the official journal of the Tunisian Republic JORT n°52 of
30 June 2009 and decree n°2009-2079 of 8 July 2009 published in the official journal of the Tunisian Republic
JORT n°55 of 10 July 2009.
3
  Cf. Law n°2009-40 of 8 July 2009 published in the official journal of the Tunisian Republic JORT n°55 of
10 July 2009.
                                                       205
2. NEW TAX ARRANGEMENTS UNDER THE SUPPLEMENTARY FINANCE LAW
FOR 2009
a. Dispensation from payment of provisional instalments for companies
encountering difficulties
Companies working in the sectors listed in the investment incentives code subject to
corporate tax at the rate of 30% and that must pay provisional instalments due throughout
2009 (after entering withholding, advances and excess tax) can submit declarations
regarding these instalments without paying them if their 2009 turnover relating to the period
prior to the submission date of a declaration of provisional instalments went down by 15% or
more compared to turnover for the same period in 2008.
Eligibility for this measure is dependent on certification by an auditor of 2008 accounts, which
serve as a reference for determining the rate of decrease in turnover for 2009 (which must
not be less than 15%) and by submission of a request to this effect for each instalment at the
relevant tax office using a model established by the administration and initialled by the
auditor, and by submission of declarations related to provisional instalments concerned by
the measure within the legally dictated timeframe1.
b. Flexibility in conditions to restore the surplus in provisional instalments
In the framework of modifications made by the supplementary finance law for 2009, a
decision was made that the non assigned surplus in provisional instalments can be the object
of restitution, knowing that in the past this surplus had to come from an advance or from
withholding. The non assigned surplus retains always the possibility to be carried forward on
provisional instalments or on annual tax due later, as it can be the object of restitution 2.
3. EXTENSION OF ELIGIBILITY FOR DEDUCTION OF LOSSES RESULTING
FROM WRITE OFF OF CLAIMS ON COMPANIES ENCOUNTERING ECONOMIC
DIFFICULTIES TO ANY COMPANY WHOSE ACCOUNTS ARE SUBJECT
TO CERTIFICATION
In the framework of encouraging companies other than lending institutions to write off their
claims in order to help companies encountering economic difficulties, the decision was made
to extend the right to deduct losses from such write off to all companies, on condition that3 :
     - the company that writes off the claim as well as the company taking advantage of this
write off are legally subject to audit by a certified auditor and that their accounts for financial
year prior to that in which the write off took place that are not prescribed get certified and do
not have any reserves affecting the tax base,
     - the company, having written off the claim, attaches to its yearly corporate tax
declaration a detailed statement of these claims specifying the amount of the claim (in
principal and interest), the identity of the beneficiary of this write off, and the references
pertaining to judgments or bylaws under which the write off took place.

1
  Cf. Article 5 of law n°2009-40 of 8 July 2009 published in the official journal of the Tunisian Republic JORT n°55 of
10 July 2009.
2
  Cf. Article 6 of law n°2009-40 of 8 July 2009 published in the official journal of the Tunisian Republic JORT n°55 of
10 July 2009.
3
  Cf. Article 36 law n°2009-71 of 21 December 2009 published in the official journal of the Tunisian Republic
JORT n°102 of 22 December 2009.
                                                         206
In case of collection, total or partial, of claims that are the object of write off, the sums
recovered are to be reintegrated in the results of the financial year during which collection
took place. It should be kept in mind that this right to deduction was applied solely by lending
institutions when they wrote off their claims on companies encountering difficulties.
As for posting a deficit in a given financial year and in the case that this deficit was recorded
for more than four years, these losses can be deducted from exceptional income earned by
companies after they have benefited from claim write off, up to the amount of this income.
The deduction can be taken up to the amount of losses that had been recorded for no more
than 10 years in the year of the deduction, on condition that the accounts for the financial
years in which losses were recorded are certified by an auditor without including reserves
affecting the tax base. Furthermore, enjoying this advantage is also dependant on
presentation at the time of the annual corporate tax declaration for the year when these
losses were deducted, of a statement detailing the losses that could not be deducted for
more than four years (during the year they were recorded), the amount of written off claims
and the year when the company benefited from write off.
4. EXPANDING THE LIST OF SERVICE ACTIVITIES ELIGIBLE FOR THE ADVAN-
TAGES PROVIDED FOR IN THE INVESTMENT INCENTIVES CODE
In the framework of increasing the services sector’s contribution to economic development, a
decision was made to expand the list of service activities eligible for the advantages provided
for in the investment incentives code to activities that produce multimedia material with
cultural content, digitalization and cataloguing of material cultural heritage as well as
digitalisation and cataloguing of audio-visual bases.
Similarly, the list of activities and infrastructure/collective equipment initiatives eligible for
regional development incentive premiums was also expanded to the services sector to
include production activities and cultural industries (production of multimedia supports with
cultural content, digitalisation and cataloguing of material cultural heritage and digita-
lisation/cataloguing of audio-visual bases), environment conservation services (sanitation,
purification and reuse of waste water, water processing), studies/advice/expertise/assistance
(water and soil analysis laboratories), and other services (print outs and reproduction of
drawings and water desalinization)1.
Furthermore, the heading «centres for medical care, rehabilitation and haemodialysis» in the
field of health has been replaced by «centres for medical care and rehabilitation».
5. MODIFICATION OF THE BASIS FOR CALCULATION OF FOPRODI’S RATE
OF INTERVENTION IN THE CAPITAL OF PROJECTS PUT FORWARD BY NEW
PROMOTERS OR BY SMALL AND MEDIUM SIZED BUSINESSES
With a view to reducing the share of beneficiaries’ capital stock equity needed to secure
FOPRODI funding in the capital of initiatives put forward by new promoters or by
small/medium sized businesses (as provided for in articles 46 and 46 A of the investment
incentives code) and so as to introduce more flexibility in the use of this fund, the decision

1
 Cf. Decrees n°2009-2751 and n°2009-2752 of 28 September 2009 published in the official journal of the
Tunisian Republic JORT n°79 of 2 October 2009.
                                                 207
has been made to calculate such participation on the basis of capital between the minimum
rate of capital stock equity set at 30% by decree n°94-489 of 21 February 1994 and 40% of
the cost of investment1.
6. MODIFICATION OF CONDITIONS AND MODALITIES FOR AWARDING
NEGOTIATED CONTRACTS FOR THE PROVISION OF GOODS AND SERVICES
WITH SPIN OFF COMPANIES
In order to encourage the technique of spin off from economic companies (as defined by law
n°2005-56 of 18 July 2005) and to further encourage promoters who were former staff
members of these companies or who came from outside to set up independent companies or
to pursue an activity that these companies carried out previously, incentive measures have
been taken to favour spin off companies when deciding on the award of negotiated contracts
for the provision of goods and services2.
The Public enterprise that has undertaken a spin off operation can sign negotiated contracts
for the provision of goods and services with the companies it has spun off (as opposed to the
direct signing of written contracts in the past), for a duration of four years starting on the date
these companies are set up (compared to the two years from date of founding that was
previously in force), up to the maximum amounts inclusive of taxes, ranging between
150,000 dinars for the first year and 37,500 dinars for the fourth year (compared to just
100,000 dinars inclusive of all taxes previously) and tapering rates ranging between 100% and 25%.
For contracts that require major specific investment at a value of not less than 500,000 dinars,
the above mentioned maximum amounts can be increased or even doubled with the same
tapering rates and for the same duration.
If more than one company is set up using this same technique in the same field of activity
and for the same period, the same terms are applied to each spin off company, instead of
organisation by the public enterprise of competition between the companies concerned up to
100,000 dinars annually taxes included.
7. TAX INCENTIVES TO PURSUE EXPORT PROMOTION
The regime of total deduction of income and profits from export (as provided for under article
10 of law n°2006-80 concerning lowering of tax rates and lightening of the tax burden for
companies as modified by article 12 of the 2008 finance law) was extended to companies
that have obtained an attestation confirming submission of an investment declaration prior to
1 January 2011 and which at the same time effectively start up operation and carry out their
first export operation in 20113. Eligibility for this incentive can go for up to ten years from the
date of the initial export operation.




1
  Cf. Decree n°2009-36 of 13 January 2009 published in the official journal of the Tunisian Republic JORT n°5 of
16 January 2009.
2
  Cf. Decree n°2009-2861 of 5 October 2009 published in the official journal of the Tunisian Republic JORT n°81 of
9 October 2009.
3
  Cf. Article 21 of law n°2009-71 of 21 December 2009 published in the official journal of the Tunisian Republic
JORT n°102 of 22 December 2009.
                                                      208
E. ONGOING ENCOURAGEMENT AND PROMOTION OF VARIOUS ECONOMIC
SECTORS
The main measures taken to promote the various sectors of the economy concerned
financing of the agricultural sector, investment incentives and promoting employment.
1. MEASURES IN FAVOUR OF THE AGRICULTURAL SECTOR
a. Financing of agriculture
(i) Revision of loan scales for seasonal crops specific to financing for potatoes
In the framework of pursuing policy in support of farmers and following the increase in the
cost of seeds and anti-fungal treatments due to higher world prices as well as the higher
quantities of seeds planted per hectare, the scale of seasonal crops specific to financing
potatoes was revised upward by 48% for potatoes, 63% for early season potatoes and 18%
for late season potatoes. This is how the amount of loans available to farmers in the first
category rose to 4,440 dinars per hectare of irrigated crops (vs. 3,000 dinars), to 3,945 dinars
(vs. 2,415 dinars) for the second, and to 2,930 dinars (vs. 2,485 dinars) for the third
category1.
(ii) Setting scales for complementary loans for seasonal crops
Given the favourable weather that marked the 2009-2010 cereal campaign, complementary
loans for seasonal crops were made available for supplementary fertilisation and anti-fungal
treatment. The scale setting the amount of these loans remained unchanged compared to its
level the season before, at 99 dinars par hectare for irrigated cereals and dryland cereals in
zone I and 86 dinars per hectare for dryland cereals in zone II 2.
b. Financing of biological rest periods
To conserve the country’s maritime resources, a decision was made to introduce a biological
rest period in certain zones for a limited period. It should be noted that biological rest is
defined in law n°2009-17 as being a mandatory stop to one or more fishing activities for a
period not to exceed three months (renewable) and in maritime zones threatened by
intensive use of or diminishing marine resources3.
A tax to finance biological rest has been introduced, tied to production and export of fishing
products. This tax is set at:
    ¾ 1% of turnover at the time of local sale, due from the producer,
    ¾ 2% of the customs value at the time of export.
Proceeds from this tax go to the fund to develop competitiveness in agriculture and fishing.
Thus the role of this fund has been expanded to biological rest4, as is the case for operations
initiated in the framework of upgrading of the fishing/aquaculture sector as well as farming
operations5.

1
  Cf. Central Bank of Tunisia circular to Banks n°2009-19 of 23 September 2009.
2
  Cf. Central Bank of Tunisia note to Banks n°2010-04 of 22 February 2010.
3
  Cf. Law n°2009-17 of 16 March 2009 published in the official journal of the Tunisian Republic JORT n°22 of
17 March 2009.
4
  Cf. Decree n°2009-1980 of 23 June 2009 published in official journal of the Tunisian Republic JORT n°51 of
26 June 2009.
5
  Cf. Decree n°2009-2788 of 28 September 2009 published in the official journal of the Tunisian Republic JORT
n°79 of 2 October 2009.
                                                    209
Henceforth, fishing units in zones at biological rest are eligible for financial aid from this fund
in the form of tangible or intangible investment, as per modalities specified in the relevant
decree1.
Still, given the importance of safeguarding national maritime wealth, authorities have decided
to create a fund entitled «fund to finance biological rest in the fishing sector» starting 2010, in
order to meet requests for financial assistance from fishing units. This fund will be financed
by the above mentioned tax as per article 2 of law n°2009-17 regarding the biological rest
system in fishing and its funding; and by grants and subsidies from private individuals and
corporate entities to the Fund, as well as any other resources that can be assigned to it 2.
c. Ongoing encouragement for the production and export of olive oil
(i) Rescheduling of loans to oil presses and exporters of olive oil
The 2005-2006 olive oil campaign was marked by a considerable drop in export prices,
which brought about deeper indebtedness for olive oil producers and exporters holding bank
loans. Faced with this situation, resident and non resident banks were authorized to go
ahead with regularization of the debt of various operators in the sector by cancelling 50% of
conventional interest and all interest on arrears for claims as of end December 2009 and
rescheduling of the remainder over a period that takes into account the ability of beneficiaries
of those loans to repay them in a period not to exceed 12 years. Rescheduled loans are
accepted by the central bank of Tunisia as counterpart for refinancing operations.
Lending institutions acting as banks and non resident banking institutions can deduct from
the corporate tax base 50% of conventional interest and all interest on arrears for loans
granted up until the end of December 2009 (part of their income) for oil presses and
exporters of olive oil that encountered difficulties due to conditions prevailing during the
2005-2006 campaign in the wake of fluctuating world prices, on condition that this
abandonment take place in 2009 and 2010.
These institutions can write off from their accounts 50% of conventional interest and all
interest on arrears for loans granted until the end of December 2009 (not part of their
income) that were abandoned in favour of oil presses and exporters of olive oil that were
facing difficulties due to prevailing conditions over the 2005-2006 season in the wake of
fluctuating world prices, on condition that the abandonment took place in 2009 and 2010.
Writing off should lead to neither an increase nor a decrease in profits subject to tax in the
year of write off3.




1
  Cf. Decree n°2009-1981 of 23 June 2009 published in the official journal of the Tunisian Republic JORT n°51 of
26 June 2009.
2
  Cf. Articles 11 to 13 of the law n°2009-71 of 21 December 2009 published in the official journal of the Tunisian
Republic JORT n°102 of 22 December 2009.
3
  Cf. Articles 24 and 25 of law n°2009-71 of 21 December 2009 published in the official journal of the Tunisian
Republic JORT n°102 of 22 December 2009 and Central Bank of Tunisia circular to Resident and Non Resident
Banks n°2010-01 of 7 January 2010.
                                                      210
(ii) Modification of modalities for intervention and functioning of the fund to promote
packed olive oil
To better target the interventions of the fund to promote packed olive oil, which seeks to support
activities carried out by any company, group of companies, consortium or professional
association, a decision has been made to redefine the field of intervention of this fund by
eliminating the distinction between actions of general interest and specific actions and to redefine
them as action in the field of trade promotion. Furthermore, intervention by this fund remains
valid to enhance the competitive and export capacities of packed olive oil assigned to support
structures by the Tunisian packed olive oil Council1.
In this regard, help from this fund distinguishes itself from the object of operations carried
out. Assistance by the fund for activities to promote marketing of olive oil is provided in the
form of provisions as follows :
  * 50% of the cost of each action, with an annual ceiling of 70,000 dinars for each company
that has exported less than 100 tonnes of packed olive oil. This ceiling increases to
150,000 dinars when annual export volume is equal to or more than 100 tonnes,
 * 70% of the cost of each activity, with an annual ceiling of 150,000 dinars, for each
consortium, group of companies or professional association.
As for premiums to encourage export of packed olive oil, the Tunisian packed olive oil
Council allotted an annual overall premium of one million dinars over 2010 and 2011 to
encourage the export of processed olive oil in packaging of no more than five litres. This
premium is available to companies whose promotional and marketing programmes have
been approved and that have started up over the given period, dealing in quantities exported
between 1 January 2010 and 31 December 2011, in line with a scale that takes into account
the capacity of the packaging, the type of olive oil and the country to which it is being shipped.
If the activities listed in the programme contract (signed with those who benefit from the fund)
do not start up within one year from the date the contract is signed, the Minister in charge of
industry can cancel the premium, after seeking the advice of the Tunisian packed olive oil Council.
It should be recalled that the fund to promote packed olive oil was set up under the
provisions of article 37 of law n°2005-106 providing for the finance law for 2006 budget and
that its intervention consists in supporting action to make Tunisian olive oil known in order to
market it and promote its export.
2. ONGOING MEASURES TO ENCOURAGE INVESTMENT AND PROMOTE JOBS
a. In promising activities at high integration rates and in recreational parks for
children and young people
In order to pursue policy to encourage promoters to invest in promising activities at high rates
of integration (notably by attributing investment premiums) and to pursue encouragement to
the private sector to invest in recreational parks for children and young people by granting
land at a symbolic dinar, a decision was made to extend to 31 December 2010 the period for

1
 Cf. Decree n°2009-1933 of 15 June 2009 published in the official journal of the Tunisian Republic JORT n°49 of
19 June 2009.
                                                     211
benefitting from these advantages, which was previously set at 31 December 2009 for both
activities1.
b. In regional development zones
In the framework of encouraging investment in regional development zones, it was decided
to extend by one year the date of effective start of activity, previously set at 31 December 2009,
for companies with an attestation confirming submission of an investment declaration prior to
entry into force of law n°2007-69 of 27 December 2007 concerning incentives for economic
initiatives to benefit from the advantages provided for in articles 23 and 25 of the investment
incentives code2.
3. APPLICATION OF LEGISLATION GOVERNING TIME SHARE TOURIST
LODGINGS
In application of the terms of law n°2008-33 concerning time share tourist lodgings, a decree
was issued in June 2009 to set the conditions for obtaining prior authorisation for the
exercise of time share tourist lodgings as foreseen in article 6 of this same law 3. In effect, the
requesting company must be constituted in line with the terms of the commercial company
code and it must be the owner of an entirely completed unit to lodge tourists.
Similarly, to keep in line with the terms of article 7 of this law, companies that wish to devote
themselves entirely to this activity must provide a bank guarantee valid for one year and
renewable annually, the amount of which is uninterrupted and renewable each time that it is
totally or partially used. This guarantee varies according to the carrying capacity of the
lodging unit : 200,000 dinars for capacity of less than 150 beds, 250,000 dinars for capacity
of between 151 and 400 beds and 300,000 dinars for capacity of more than 400 beds4.
Also, to strengthen the guarantees available to the clients of this type of company, the model
contract for sale of a time share as provided for under article 10 of this law was approved 5.
F. OTHER MEASURES
Various other measures were taken, involving on the one hand better conditions for the
granting of loans by the fund to promote housing for wage earners (FOPROLOS), by the
national health insurance fund (CNAM) and by associations, and on the other hand
promotion of technology, research & development and redefinition of the national
standardization system.




1
  Cf. Articles 14 and 15 of law n°2009-71 of 21 December 2009 published in the official journal of the Tunisian
Republic JORT n°102 of 22 December 2009.
2
  Cf. Article 18 of law n°2009-71 of 21 December 2009 published in the official journal of the Tunisian Republic
JORT n°102 of 22 December 2009.
3
  Cf. Decree n°2009-1935 of 15 June 2009 published in the official journal of the Tunisian Republic JORT n°49 of
19 June 2009.
4
  Cf. Joint bylaw of Ministers of Tourism and of Finance of 16 June 2009 published in the official journal of the
Tunisian Republic JORT n°50 of 23 June 2009.
5
  Cf. Minister of Tourism bylaw of 16 June 2009 published in the official journal of the Tunisian Republic JORT
n°50 of 23 June 2009.
                                                      212
1. MEASURES OF A SOCIAL NATURE
a. Upward revision for loans granted in the framework of FOPROLOS
Because of the rising price of real estate and of building materials, it was decided to raise the
amount of loans granted through FOPROLOS to finance acquisition and construction of
housing.
Thus the amount for loans was increased :
   - from 110 to 135 times the guaranteed interprofessional minimum wage (SMIG) for low
cost housing for wage earners whose wages are between SMIG and three times SMIG for
covered area of no more than 50 m2 for individual housing and 65 m2 for collective housing,
with a ceiling not to exceed 90% of the price of housing. For this category, the national
solidarity fund assumes 3,000 dinars of the wage earner’s minimum auto financing, the
amount having been increased to 4,000 dinars in 2009,
   - from 165 to 170 times the SMIG for collective low cost housing acquired by wage
earners whose wages are between two and three times the SMIG for covered area of no
more than 75 m2, with a loan ceiling not to exceed 90% of the price of housing,
   - from 210 to 220 times the SMIG for vertical collective housing acquired by wage earners
whose wages are between three and four and a half times the SMIG for covered area of
between 80 m2 and 100 m2, with a loan ceiling not to exceed 85% of the price of housing.
This last category of beneficiary can repay his or her loan over a period of 25 years, up from
20 years in the past, increased by one year of franchise exempt of interest prior to the start of
loan repayment1.
b. Modification of financing conditions by the national health insurance fund
(CNAM) for initiatives in health and labour safety
With a view to harmonising and simplifying prevailing legislation governing financing of health
and labour safety initiatives following creation of CNAM (which has become the managing
authority in charge of financing these initiatives in place of the national social security fund
CNSS) and in order to have a greater number of companies take advantage of these
initiatives that target essentially keeping the human capital of these companies in good
shape, modifications have been introduced as follows2 :




1
  Cf. Decree n°2009-3586 of 18 November 2009 published in the official journal of the Tunisian Republic JORT
n°94 of 24 November 2009.
2
  Cf. Decree n°2009-2344 of 12 August 2009 published in the official journal of the Tunisian Republic JORT n°67 of
21 August 2009.
                                                      213
      Description                 Former regulation                     New regulation
Seniority in affiliation       Three years minimum.              One year minimum.
Situation of the company       Situation in order for contri-    Situation in order for contri-
                               butions and repayment of          butions and repayment of
                               loans.                            loans.
Maximum amount for the         70% of the cost of the            65% of the cost of the approved
loan                           approved project, up to           project, up to 300,000 dinars.
                               300,000 dinars.
Investment premium             20% of the cost of the            25% of the cost of the ap-
                               approved project.                 proved project.
Auto financing                 30% of the cost of the            35% of the cost of the ap-
                               approved project.                 proved project.
Portions of release of the     1- 40% when the project           1- 50% when the project begins.
amount of the loan and         begins.                           2- 50% when the project is
the premium                    2- 40% when the project is        60% completed.
                               50% completed.
                               3- 20% when the project is
                               completed.
Period of implementation       Three years from the date         Not to exceed two years from
of the project                 on which the first portion is     the date of release of the first
                               obtained.                         portion.
Interest rate applied to the   6% per annum.                     5% per annum. This rate goes
loan                                                             down by one point when a com-
                                                                 pany has a bank guarantee.
Grace period (before pro-      Three years from the date         Three years from the date of
ceeding with encashment)       of release of the first portion   release of the first portion of
                               of the loan.                      the loan.
Loan repayment                 10 years including the            10 years including the grace
                               grace period.                     period.
Non implementation or          Submission of a motion to         Final notice by means of a
non respect of the con-        the commission for forfeit-       registered letter indicating that
ditions for granting of the    ture of the loan and of the       30 days have been granted to
loan and of the premium        premium granted to bene-          regularize the situation or to
                               ficiaries and refund of           formulate a response to the
                               portions received, along with     notice received, with the same
                               the interest rate calculated      deadline.
                               with reference to the rate        Upon      expiration    of   this
                               applied on the money              deadline, the motion will be
                               market.                           submitted to the Commission
                                                                 to issue a decision on :
                                                                 * forfeiture of the loan and of
                                                                 the premium granted to the
                                                                 beneficiary, and in this case
                                                                 refund of received amount is
                                                                 made along with the interest
                                                                 rate calculated with reference
                                                                 to the rate applied on the
                                                                 money market, or
                                                                 * extension of the period for
                                                                 implementing the project.


                                              214
In the same framework, small businesses with less than 10 employees can now get loans
from CNAM to promote labour safety, with a ceiling of 5,000 dinars released all at once as
well as an investment premium equal to 50% of the amount of the loan. The company that
benefits from this loan must implement the project in a time frame of not more than six
months starting from the date the loan and the premium are obtained. This loan, granted at
an interest rate of 5%, is reimbursable in monthly instalments over a period of between three
and five years, according to the amount of the loan and the advice of the commission in
charge of examining applications for loans and investment premiums, with a grace period of
six months starting from the date on which the loan is granted.
The composition of the commission (which is now under CNAM rather than CNSS) has been
modified. The chairman of CNAM or his representative chairs the commission, which is made
up of four representatives of the Ministry of social affairs/solidarity/Tunisians abroad, two
representatives of CNAM, and a representative of CNSS.
c. Modification of conditions for granting microcredit
In wanting to further boost the objectives of the national solidarity system (which seeks
economic and social integration), associations have been allowed since 1999 to grant
microcredit to economically weak individuals in order to help them launch productive
individual or family-based initiatives and to finance needs so as to improve living conditions.
Thus, faced with the higher cost of living and of products, a decision has been made to
increase the amount of microcredit granted by the structures mentioned above. The
maximum has gone up to 5,000 dinars vs. 4,000 previously1. It should be kept in mind that
this microcredit is granted at a rate of 5%, in an amount not to exceed 700 dinars for loans
granted to finance needs that will lead to better living conditions. The amount of the loans
granted by each association for the latter category must not exceed 10% of assigned
resources, as provided for under article 9 of organic law n°99-67 of 15 July 1999 concerning
microcredit granted by associations. Furthermore, to better keep down management and
administrative costs, associations that grant microcredit have been authorized to charge
beneficiaries of loans a commission for review of an application for microcredit at a flat rate
of 2.5% of the amount of the loan2.
d. Reducing the tax burden for individuals with limited income
Concerned about the living conditions of people with limited income and in order to reduce
the tax burden on this category of subjects, the Tunisian authorities decided to reduce the tax
burden for these individuals by allowing them, when determining their net income, to deduct
from the taxable base interest on loans for the acquisition or construction of low cost housing
as defined in legislation relating to FOPROLOS intervention. It should be pointed out that
the additional deduction available to wage earners paid at SMIG has been increased to
1,000 dinars of their annual income, up from 500 dinars previously, bringing the exonerated


1
  Cf. Minister of Finance bylaw of 16 December 2009 published in the official journal of the Tunisian Republic
JORT n°102 of 22 December 2009.
2
  Cf. Minister of Finance bylaw of 30 March 2009 published in the official journal of the Tunisian Republic JORT
n°27 of 3 April 2009.

                                                     215
amount of tax for this category of individuals to 2,500 dinars instead of 2,000 dinars prior to
1 January 20101.
In this same context and to take into account the expenditure required to pursue higher
studies, the amount of the additional deduction for dependent children was raised from
300 dinars to 600 dinars per dependent child following higher studies who does not have a
university scholarship and who is less than 25 years old.
Furthermore, in the framework of helping and taking charge of people with special needs, the
additional deduction mentioned above has been raised from 750 to 1,000 dinars per disabled
child, regardless of the age or the standing of the individual2.
e. Regrouping measures to encourage job promotion
To ensure better transparency and greater harmony in promoting jobs for graduates of higher
education, all relevant regulations along with conditions and modalities to benefit from the
programmes of the national job fund3 have been regrouped in a single text. It is in this
context that the following programmes were created in the framework of intervention of this
fund :
    - introductory courses to the professional life,
    - contract of insertion of the graduates,
    - contract of adaptation and professional insertion,
    - contract of reintegrating working,
    - programme of backing promoters of small businesses, and
    - solidarity employment contract.
Consequently, to harmonise the various measures taken to promote jobs (especially
for graduates of higher education), a decision was made to repeal the terms of law
n°2005-91 regarding incentives to the private sector to recruit university graduates by State
assumption of a portion of wages paid to young graduates4.
2. REDEFINITION OF THE NATIONAL STANDARDISATION SYSTEM
In an international context marked by growing globalisation and competition, Tunisia has
opted for legislation to set down general rules for the national standardisation system and to
redefine the attributions of the national institute of standardisation and industrial property
(INNORPI), which was set up under since-repealed law n°82-66 of 6 August 1982 governing
standardisation and quality5.

1
  Cf. Article 39 of law n°2009-71 of 21 December 2009 published in the official journal of the Tunisian Republic
JORT n°102 of 22 December 2009.
2
  Cf. Article 40 of law n°2009-71 of 2 December 2009 published in the official journal of the Tunisian Republic
JORT n°102 of 22 December 2009.
3
  Cf. Decree n°2009-349 of 9 February 2009 published in the official journal of the Tunisian Republic JORT n°12 of
10 February 2009.
4
  Cf. Article 19 of law n°2009-71 of 21 December 2009 published in the official journal of the Tunisian Republic
JORT n°102 of 22 December 2009.
5
  Cf. Law n°2009-38 of 30 June 2009 published in the official journal of the Tunisian Republic JORT n°54 of
7 July 2009.
                                                      216
3. DIGITAL ECONOMY : MODIFICATION OF THE STRUCTURE AND ATTRIBUTIONS
OF THE COMMITEE OF EXPERTS
The committee of experts that in the past was entrusted with operations to evaluate projects
is henceforth in charge of helping, upon demand, public entities in evaluation operations, in
drawing up partnership agreements, negotiation of their clauses and monitoring of their
implementation, and participating in technological progress to promote investment in the
digital economy1.
The make-up of the committee of experts has been modified. Henceforth it will be chaired by
the minister in charge of communication technologies or his or her representative and it will
include three people known for their expertise in fields related to the digital economy along
with expert members chosen for the most part from operators of public telecommunications
networks and from centres that carry out studies and research in telecommunications and
computer fields. This committee was previously made up of a chairman and expert members
in sectors related to projects with which there were partnership agreements.
4. PROMOTION OF TECHNOLOGY AND RESEARCH-DEVELOPMENT
The list of activities eligible for the incentives provided for in the investment incentive code
under article 39 (total or partial State assumption of expenditure for staff training) and article
42 (exemption from customs duty and taxes with an equivalent effect, suspension of VAT
and of consumer duty on imported equipment with no equivalent manufactured locally that
are needed to carry out these investments, suspension of VAT on equipment manufactured
locally and of a premium) has been extended to certain service activities, to be set
subsequently, as is the case for investment in industry, agriculture and fishing2.




1
  Cf. Decree n°2009-2019 of 23 June 2009 published in the official journal of the Tunisian Republic JORT n°52 of
30 June 2009.
2
  Cf. Article 16 of law n°2009-71 of 21 December 2009 published in the official journal of the Tunisian Republic
JORT n°102 of 22 December 2009.
                                                     217
                 II. LIQUIDITY AND BALANCE OF THE FINANCIAL SYSTEM
The comfortable cash position at banks that marked 2008 continued into 2009, requiring
greater intervention by the Issuing Institution notably in the form of negative calls for bids to
absorb excess liquidity. This situation reflected trend in banks’ core resources that grew at a
faster pace than uses.
A. TRENDS IN BANK LIQUIDITY1
The excess liquidity that characterised the money market in 2008 persisted in 2009,
reflecting the higher level of net assets abroad (+1,802 MTD). This extent was however
mitigated by the restrictive effect of the higher volume of banknotes and coins in circulation
(-502 MTD) and the drop in the net balance of public administration (-110 MTD). In this
context, monetary policy operations led to average tapping of 844 MTD, compared to
-418 MTD in 2008. Consequently, assets in banks’ ordinary current accounts at the Central
Bank went up by 64 MTD to 746 MTD.

                TRENDS IN TOTAL AUTONOMOUS FACTORS AND REQUIRED RESERVES
     (in MTD)
       2,200
       2,000
       1,800
       1,600
       1,400
       1,200
       1,000
         800
         600
         400
         200
           0




                              Total Autonomous Factors        Required Reserves

There were four distinct phases for excess bank liquidity throughout the year.
The first period, corresponding to the first quarter of the year, was marked by sustained
level of excess bank liquidity that reflected the expansionary impact of higher net assets
abroad and of the net balance of public administration, although this was mitigated by the
higher volume of banknotes and coins in circulation.
Amounting to 9,667 MTD on average in March 2009, net assets abroad went up by
1,004 MTD over the average level in December 2008, thanks to the 821 MTD increase in net
assets in foreign currency and the 388 MTD drop in the account «intervention on the money
market in foreign currency». Their expansionary effect on liquidity was however mitigated by
the 230 MTD increase in the «foreign currency held by authorised intermediaries» account.
The increase in net assets in foreign currency, although lower than it might otherwise have
been because of considerable expenditure to draw down external debt, was notably the
result of :

1
    The analysis was made on the basis of average data.

                                                      218
      - encashment of a high level of income from drawings on external borrowings, notably
from the European Investment Bank EIB (139 MTD, of which 129 MTD went to TAV-Tunisia),
the French development agency AFD (36 MTD), the African Development Bank ADB (24
MTD), the Japanese Bank for International Cooperation JBIC (15 MTD), and the International
Bank for Reconstruction and Development IBRD (15 MTD),
      - income from foreign direct investment (FDI), notably 34 MTD paid by the Gulf
Finance House consortium to the Tunis Financial Harbor company in charge of creating a
financial centre in Tunis.
Similarly, the net balance of public administration, posting 180 MTD in March 2009,
increased an average of 219 MTD. This had an expansionary effect on bank liquidity. The
increase was due mainly to the 231 MTD drop in the balance of the Treasury’s current
account, caused by commitment of a high level of expenditure. This included in particular
reimbursement net of subscriptions to Treasury bonds (-284 MTD), given that a substantial
volume of bonds equivalent to Treasury bonds BTA (712 MTD) fell due in March. There were
also transfers to a number of public enterprises and structures (1,111 MTD), notably social
security funds, the Tunisian oil activities company ETAP, the cereals Board, and the national
oil Board ONH, along with repayment of external debt. Still, the expansionary effect
generated by such expenditure (aside from repayment of external debt maturities, which had
no impact on liquidity) was mitigated by the restrictive impact of the high level of tax revenue
that had been mobilised, combined with encashment of a portion of income from the State’s
share in the capital of the Gafsa Phosphates Company CPG (200 MTD) for the accounting
year 2008. Over the first quarter of 2009, the balance of the Treasury current account
showed strong fluctuations, varying between 69 MTD and 1,047 MTD.
On the other hand, banknotes and coins in circulation, coming to 4,669 MTD in March 2009,
went up by 37 MTD over the figure in December 2008, had a restrictive effect in this same
amount on bank liquidity. Over the period under review, their level fluctuated between
4,534 MTD and 4,702 MTD.
In light of trends in the main autonomous factors of bank liquidity, monetary policy operations
over the first quarter of 2009 led to average tapping of 713 MTD in the form of negative calls
for bids and deposit facilities. Consequently, assets in banks’ current accounts fell from 1,036
MTD in December 2008 to 707 MTD in March 2009, influenced by lowering of reserve
requirement rates as per the terms of Central Bank of Tunisia circular to banks n°2008-24 of
31 December, effective 2 January 2009.




                                              219
TRENDS IN BANK LIQUIDITY FACTORS                                                                       (Daily averages in MTD)

                                                          Quarterly averages in 2009                                           1
                                     Year                                                                 Year       Variation
         Description
                                     2008                                                                 2009          2009
                                                      I            II           III           IV                        2008
Banknotes and coins in
circulation                           -4,414        -4,628        -4,719       -5,150        -5,168       -4,916          -502
Net balance of public
administration                           -22          -106              +3             0       -426          -132         -110
Of which: Treasury current
account balance                        -542          -654          -589          -521          -874         -660          -118
Net assets abroad                    +8,057        +9,369        +9,650       +10,040       +10,377       +9,859        +1,802
Of which : Net assets in
foreign currency                    +10,264       +12,028       +12,131       +12,859       +13,181     +12,550         +2,286
Other net factors                    -2,521        -3,242        -3,294        -3,224        -3,123      -3,221           -700
Of which : foreign currency
pending assignment                    -1,986        -2,270        -2,245       -2,167        -2,129       -2,203          -217
=Total autonomous factors
(A)                                  +1,100        +1,393        +1,640        +1,666        +1,660       +1,590         +490
Calls for bids                         -471          -696          -934          -888          -900         -855         -384
1-7 day-allowance uptakes                +1            +5             0             0             0           +1            0
Net tapping transactions                 -2            -5             0             0             0           -1           +1
Open market transactions                +25           +25           +25           +25           +25          +25            0
Repurchase options                      +29             0             0             0             0            0          -29
24 hour deposit standing
facilities                                  0             -17           -15           -33        -27          -23          -23
24 hour credit standing
facilities                                  0              0            +2             0        +32            +9           +9
=Monetary Policy
Operations (B)                          -418          -688          -922          -896         -870          -844         -426
=Assets in banks current
accounts (A)+(B)                       +682          +705          +718          +770          +790         +746           +64
1 The (-) sign indicates a restrictive effect and the (+) sign indicates an expansionary effect on bank liquidity.

Starting in April, excess liquidity began to decrease and this lasted until July, influenced by
the restrictive effects exercised by the increase in banknotes and coins in circulation and the
drop in the net balance of public administration. The extent of the restrictive impact of these
two factors was however mitigated by the expansionary effect due to the increase in net
assets abroad. Still, calculated in terms of averages for the period April-July, the surplus rose
to a higher level than that recorded over the previous period because of the impact of
massive redemption of bonds equivalent to Treasury bonds in March, which caused greater
excess liquidity on the money market throughout that month and ongoing surpluses in the
following months.
In July 2009, the net balance of public administration dropped by 398 MTD from the figure in
March, contributing to tightening of bank liquidity. This drop was due mainly to the higher
balance of the Treasury current account (up by 478 MTD), influenced in particular by
encashment of major tax revenue, subscriptions to Treasury bonds (137 MTD, of which
98 MTD were in the form of bonds equivalent to Treasury bonds) and collection of income from
State shares in the capital of Tunisie Telecom (139 MTD), from the CPG (150 MTD) and from
the Tunisian Chemical Group GCT (150 MTD) for the 2008 accounting year. The effect of
income collected was however mitigated by commitment of major expenditure, notably for
transfers to certain public enterprises and structures (1,329 MTD), in particular social security
funds, oil companies, the cereals Board, and the ONH, along with reimbursement of external


                                                                220
debt and payment of a substantial amount of interest on BTA (237 MTD). It should be pointed
out that over the period under review, the balance of the Treasury current account experienced
major fluctuations of between 239 MTD and 1,037 MTD.
TRENDS IN BANK LIQUIDITY FACTORS                                                    (Data at the end of period in MTD)
                       Dec.                                              2009                            Variation1
     Description                                                                                         Dec. 2009
                       2008    March                                June       Sept.          Dec.
                                                                                                         Dec. 2008
Banknotes and coins in
circulation                           -4,641        -4,690           -4,873      -5,208        -5,276          -635
Net balance of public
administration                         +169           +351            +143        +121            +46          -123
Of which :Treasury current
account balance                        -397           -208             -489       -320          -396            +1
Net assets abroad                    +8,752         +9,592           +9,673    +10,349       +10,319        +1,567
Of which:Net assets in
foreign currency                    +11,656       +12,245           +12,207    +13,299       +13,353        +1,697
Other net factors                    -3,004        -3,365            -3,264     -3,135        -3,092           -88
Of which : foreign currency
pending assignment                    -2,128        -2,286           -2,172      -2,135        -2,127            +1
=Total autonomous factors
(A)                                  +1,276         +1,888           +1,679     +2,127        +1,997          +721
Calls for bids                            0           -780             -725     -1,477        -1,021         -1,021
1-7 day-allowance uptakes                 0              0                0          0             0              0
Net tapping transactions                  0              0                0          0             0              0
Open market transactions                +25            +25              +25        +25           +26             +1
Repurchase options                        0              0                0          0             0              0
24 hour deposit standing
facilities                                 0            -52            -304        -195          -713          -713
24 hour credit standing
facilities                                 0              0                0           0          +65           +65
=Monetary Policy
Operations (B)                           +25          -807           -1,004      -1,647        -1,643        -1,668
=Assets in banks current
accounts (A)+(B)                       +1,301         +1,081          +675         +480          +354          -947
1
    The (-) sign indicates a restrictive effect and the (+) sign indicates an expansionary effect on bank liquidity.

Similarly, in increasing by 329 MTD between March and July 2009, banknotes and coins in
circulation had a restrictive effect in this same amount on bank liquidity. Their level, varying
between a minimum of 4,627 MTD and a maximum of 5,150 MTD, was caused by higher
household expenditure over the summer.
On the other hand, the 218 MTD increase in net assets abroad had an expansionary effect
on bank liquidity, due to higher net assets in foreign currency (+233 MTD) in the wake of
mobilisation of major external resources in the form of :
- external borrowings, particularly from the ADB (120 MTD, of which 113 MTD went to the
Ministry of Equipment, Housing and Land Planning to finance a project of improving road
network), from the EIB (108 MTD, of which 47 MTD went to the Tunisian Electricity and Gas Com-
pany STEG and 38 MTD to finance the health sector) as well as from various foreign donors
to the TAV-Tunisia Company that is in charge of constructing the Enfidha Airport (77 MTD) ;
- foreign direct investment, notably payment by France Télécom of its share in the cost of
acquisition of the third landline and mobile phone licence (92 MTD), acquisition of shares by
Cemolins Internacional SL in SOTACIB’s capital increase (29 MTD), and setting up by British
Gas of its affiliate The Tunisian Processing Company (36 MTD) ; and
- tourism receipts and remittances by Tunisians working abroad.

                                                              221
The extent of this revenue was however mitigated by expenditure committed to draw down
external debt.
In light of trends in the autonomous factors of bank liquidity over the period under review,
monetary policy operations led to tapping of 702 MTD in July, vs. 1,028 MTD in March. On
average, some 894 MTD were absorbed in the form of negative calls for bids and deposit
facilities. Consequently, banks’ assets in ordinary current accounts at the Central Bank went
up by 36 MTD to 743 MTD in July 2009.
MAIN TRENDS IN AUTONOMOUS FACTORS OF BANK LIQUIDITY*                                           (Daily average in MTD)
                                                         Mar. 2009         Jul. 2009      Sep. 2009       Dec. 2009
                    Description                          Dec. 2008         Mar. 2009      Jul. 2009       Sep. 2009
  Banknotes and coins in circulation                            -37             -329           -248            +22
  Net balance of public administration                       +219               -398          +304            -481
  Of which: Treasury current account balance                 +231               -478          +495            -485
  Net assets abroad                                         +1,004             +218           +430              -41
  Of which : Net assets in foreign currency                  +821              +233           +750            -167
  Other net factors                                           -477             +219              +7            +96
  Of which: Foreign currency pending assignment               -123             +186             +14            +19
  = Total autonomous factors                                 +709               -290          +493            -404
* The (-) sign indicates a restrictive effect and the (+) sign indicates an expansionary effect on bank liquidity.
During the period August-September, surplus liquidity once again increased as the net
balance of public administration rose along with net assets abroad, but their impact was
mitigated by the higher volume of banknotes and coins in circulation.
In reaching 10,315 MTD in September 2009, net assets abroad rose by 430 MTD over the
figure in July, contributing to more abundant bank liquidity. This increase was due mainly to
750 MTD rise in net assets in foreign currency, with the expansionary effect mitigated by the
restrictive impact of increases in the headings «Tunisian government’s special account in
foreign currency», «intervention on the money market in foreign currency», and «foreign
currency held by authorised intermediaries» in the respective amounts of 212 MTD, 85 MTD
and 23 MTD.
The increase in net assets in foreign currency was however mitigated by high expenditure
committed to draw down external debt, notably the debenture loan contracted in 1999 on the
European financial market in the amount of 225 million euros. This increase was largely the
result of encashment of major amounts from drawings on external borrowings, in particular
the 125 million dollars granted by IBRD in the framework of the programme to support
integration and competitiveness and the 125 million dollars by ADB for the programme to
support integration, placed in the «Tunisian government’s special account in foreign
currency», the loans granted by the International Financial Corporation IFC (50 MTD to
TAV-Tunisia) and that granted by the AFD (28 MTD, of which 19 MTD went to the Ministry of
Equipment, Housing and Land Planning to rehabilitate poor neighbourhoods), further to
higher tourist receipts (in line notably with rising number of tourists from the Maghreb) and
from remittances by Tunisians working abroad.
Similarly, the 304 MTD increase in the net balance of public administration had an
expansionary effect on bank liquidity. Its increase was due mainly to the 495 MTD drop in the
balance of the Treasury current account. The expansionary effect of this drop was however
mitigated by the restrictive effect of the 187 MTD increase in the account entitled

                                                        222
«Tunisian Government, miscellaneous accounts», following encashment on 10 August of
proceeds from the sale of the third landline and mobile phone license to the investors
mentioned above. The drop in the balance of the Treasury current account was also due to
drawing down of external debt, particularly the debenture loan in euros mentioned above,
along with concurrent transfers to a number of public enterprises and structures for a total of
766 MTD. This funding went mainly to oil companies, social security funds, the cereals Board
and the ONH. The expansionary effect generated by this expenditure (aside from
reimbursement of external debt, particularly borrowing in euros, which had no effect on
liquidity) was mitigated by the impact of mobilisation of a large volume of tax revenue,
combined with encashment of 193 MTD in subscriptions to Treasury bonds (115 MTD in
the form of BTA), as well as a portion of earnings from State holdings in the capital of CPG
(150 MTD) and GCT (31 MTD) for the accounting year 2008. Given the high level of income
and expenditure flows for the period under review, the balance of the Treasury current
account varied between a minimum of 75 MTD and a maximum of 839 MTD.
On the other hand, banknotes and coins in circulation amounted to 5,246 MTD in September,
an increase of 248 MTD over the July figure. This led to a tightening in banks’ cash position
for the same amount. Over the period under review, their level fluctuated between a
minimum of 5,150 MTD on 1 August and a maximum of 5,356 MTD on
22 September. This trend was caused by faster growth in household expenditure over the
summer, during the summer sales and the month of Ramadan, and in connection with the
Aid el Fitr holiday.
In light of trends in the autonomous factors of liquidity, monetary policy operations led to
1,149 MTD in tapping in September, compared to 702 MTD in July. On average, an amount
of 1,018 MTD was absorbed in the form of negative calls for bids and deposit facilities over the
period under review, which was 124 MTD more than for the previous period (April-July). Conse-
quently, assets in banks’ current accounts went up by 46 MTD to 789 MTD in September.
Over the last quarter of the year, excess liquidity was down sharply because of the
simultaneous effects of the drop in the net balance of public administration and to a lesser
degree of net assets abroad, the extent of which was mitigated by the lower level of
banknotes and coins in circulation.
The net balance of public administration fell from 86 MTD in September to -395 MTD in
December, exerting a restrictive effect on banks’ cash position. This trend was influenced by
the 485 MTD increase in the balance of the Treasury’s current account, which fluctuated over
the period under review between a minimum of 348 MTD and a maximum of
1,096 MTD. The increase in this account was due mainly to encashment of major resources,
especially tax revenue, subscriptions to Treasury bonds (270 MTD) and 145 MTD from
encashment of a portion of income from State holdings in a number of public enterprises for
the fiscal year 2008, notably CPG (105 MTD) and GCT (30 MTD). The restrictive effect of
this income was however mitigated by the expansionary impact generated by outlays for
subsidies paid to public enterprises and structures in the overall amount of 1,653 MTD, going
in particular to the cereals Board, social security funds, the ETAP, the ONH, transport
companies, the STEG and the national tobacco and match state-owned company RNTA,
along with repayments of domestic and external debt maturities.

                                              223
Over the period under review, net assets abroad fell by 41 MTD. Their effect on bank liquidity
was the result of contrasting trends in their components, that is to say :
- the drop in net assets in foreign currency (-167 MTD) in the wake of commitment of major
expenditure, notably to draw down external debt. The impact of this was however mitigated
by encashment of drawings on external borrowings granted in particular by the EIB along
with the Islamic Development Bank IDB (174 MTD) to the TIFERT company that is in charge
of creating a phosphoric acid production unit, by BNP Paribas to TUNISAIR (39 MTD), and
by the AFD to the STEG (32 MTD) and to the fund for loans and assistance to local
government (18 MTD) ; further to drawings placed in “Tunisian Government special account
in foreign currency” and having no impact on liquidity.
- the 233 MTD increase in the «Tunisian Government’s special account in foreign currency»
thanks to encashment of resources in foreign currency, notably from external loans granted by
the EIB and the ADB to the Ministry of Equipment, Housing and Land Planning (113 MTD) and
by the AFD (70 MTD, of which 38 MTD went as financing for the hotel sector, 19 MTD to the
Ministry of Agriculture, Hydraulic Resources and Fishing, and 13 MTD to STEG), and
- the 127 MTD increase in the «foreign currency held by authorised intermediaries» account.
The restrictive effect of the trends mentioned above was mitigated by the expansionary impact of
the 485 MTD drop in the account «intervention on the money market in foreign currency».
On the other hand, banknotes and coins in circulation amounted to 5,224 MTD in December
(vs. 5,246 MTD in September), contributing to a 22 MTD increase in banks’ cash position.
Over the period under review, their level fluctuated between a minimum of 5,019 MTD on
21 October and a maximum of 5,430 MTD on 26 November, which corresponded to the eve
of the Aid El Idha holiday.
In light of trends in the autonomous factors of liquidity over the period under review,
monetary policy operations led to average tapping of 744 MTD in December vs. 1,149 MTD
in September. On average, an amount of 927 MTD was absorbed in the form of negative
calls for bids and deposit facilities over the last quarter, i.e. 91 MTD less than the previous
period (August-September). Assets in banks’ current accounts came to 790 MTD in
December, almost the same figure as in September 2009.
B. MONETARY POLICY OPERATIONS 1
In light of difficult international conditions caused by the impact of the world financial crisis on
economic activity, monetary authorities on 17 February 2009 lowered the Central Bank of
Tunisia’s key rate from 5.25% to 4.50% in the wake of easing inflationary pressure, with a
view to helping businesses and promoting investment, especially for initiatives that create
jobs. This was preceded by the decision taken on 31 December 2008 2 to lower reserve
requirement rates, effective 2 January 2009, a measure that helped to pay up some
250 MTD in liquidity to banks with a view to giving them greater capacity to stimulate the
economic activity.



1
    The analysis was made on the basis of average data.
2
    Cf. Central Bank of Tunisia circular to Banks n°2008-24 of 31 December 2008.

                                                       224
Moreover, in the framework of modernising money market instruments and diversifying tools
to manage liquidity, the Issuing Institution decided to introduce standing facilities for 24 hour
credit and deposits. These two instruments can be used by banks at their initiative to meet
their needs or place any excess liquidity they may be holding temporarily. Recourse, at the
end of the day to this credit facility involves pledging of public securities, claims or securities
on companies or private parties, at an interest rate equal to the Central Bank of Tunisia’s key
rate plus a margin. The deposit standing facility is also settled at the end of the day,
remunerated at a rate equal to the Central Bank of Tunisia’s key rate minus a margin. Worth
of note that these margins are to be previously communicated to banks.
Introduction of standing facilities helps to make the interbank market more dynamic while
avoiding erratic fluctuations in the interest rate on this market, which it is hoped will remain
within a corridor determined by the deposit facility’s rate (to be henceforth the floor figure)
and that of the credit facility (to become the ceiling). These rates have been set at 4% and
5% respectively, i.e. 50 base points on either side of the key rate.
1. MONETARY POLICY OPERATIONAL FRAMEWORK
Conditions of excess liquidity on the money market, which was becoming structural in nature,
led the Issuing Institution to intervene in 2009 by means of negative auctions for periods of
up to one month. An average amount of 855 MTD was absorbed in this form. These
interventions were accompanied by supplementary operations carried out by banks via
recourse to 24 hour standing deposit facilities (-23 MTD).
No open market operations had been carried out since October 2007, with the outstanding
balance remaining throughout 2009 at 25 MTD.
Transactions on the interbank market were down by 12% to an average of 508 MTD,
compared to an increase of 60% the year before. This was the result of drops in sight
transactions (66 MTD) and forward transactions (7 MTD). Although they went down, forward
transactions remain dominant with a 75% share of total transactions.
Along with the high level of excess liquidity on the market, monetary policy operations in the
form of tapping of liquidity went through four distinct phases in 2009.
Over the first quarter of 2009, marked by growing excess liquidity, the Issuing Institution
focused its intervention on negative calls for bids for durations ranging from one week to one
month. An average amount of 696 MTD was absorbed in this form in total.
The Central Bank also resorted to fine tuning operations in January to absorb excess
liquidity. Its intervention accounted for an average tapping of 5 MTD, noting that a maximum
amount of 117 MTD was recorded, under this form, over the considered period. Just one
allowance uptake for a duration of 3 days was carried out, involving an amount of 133 MTD.
With the introduction of deposit and credit facilities, these operations will cease. This can be
seen in banks’ resorting in February and March to deposit facilities in amounts ranging from
8 MTD to 234 MTD for an average of 17 MTD for the period.




                                               225
QUARTERLY TRENDS IN THE VOLUME OF MONETARY POLICY OPERATIONS
                                                                                           (Daily averages in MTD)
                                         Year               Quarterly     averages        2009              Year
             Description
                                         2008             I         II         III            IV            2009
 Calls for bids                           -471           -696      -934          -888            -900       -855
 1-7 day-allowance uptakes                  +1             +5         0             0               0         +1
 Net tapping transactions                   -2             -5         0             0               0         -1
 Open market transactions                  +25            +25       +25           +25             +25        +25
 Repurchase options                        +29              0         0             0               0          0
 24 hour deposit standing facilities         0            -17       -15           -33             -27        -23
 24 hour credit standing facilities          0              0        +2             0             +32         +9
                    Total                 -418           -688      -922          -896            -870       -844

Interbank transactions, on average, came to 516 MTD, 77% in forward transactions.
Over the second period (April-July), despite a lower volume of excess bank liquidity
compared to March, the Central Bank intervened to absorb an average amount of 882 MTD,
in the form of negative calls for bids. This was 186 MTD more than in the first quarter, since
the average surplus for the entire period was higher than that calculated (in terms of
quarterly averages) for the previous period, influenced by the higher excess liquidity
prevailing in March. These negative calls for bids also involved durations of one week and
one month, for average amounts ranging from a minimum of 658 MTD in July to a maximum
of 1,139 MTD in April.
TRENDS IN THE VOLUME OF MONETARY POLICY OPERATIONS                                (Data of end of period in MTD)
                                                                                2009
          Description                 Dec. 2008
                                                        March            June            Sept.             Dec.
Calls for bids                             0             -780          -725             -1,477             -1,021
1-7 day-allowance uptakes                  0                0             0                  0                  0
Net tapping transactions                   0                0             0                  0                  0
Open market transactions                 +25              +25           +25                +25                +26
Repurchase options                         0                0             0                  0                  0
24 hour deposit standing facilities        0              -52          -304               -195               -713
24 hour credit standing facilities         0                0             0                  0                +65
                      Total              +25             -807        -1,004             -1,647             -1,643

At the same time, in light of trends in the factors of liquidity, banks went to the Issuing
Institution to place their excess liquidity, using deposit facilities for amounts ranging from
4 MTD to 304 MTD.
Transactions in the interbank compartment fell by 102 MTD from the previous period’s figure
to 414 MTD, influenced mainly by the lower volume of forward transactions (-89 MTD).
MAIN TRENDS IN MONETARY POLICY OPERATIONS                                                 (Daily averages in MTD)
                            Mar. 2009   Jul. 2009                               Sep. 2009               Dec. 2009
           Description
                            Dec. 2008   Mar. 2009                               Jul. 2009               Sep. 2009
Calls for bids                 -1,003       +293                                        -430               +392
1-7 day-allowance uptakes           0          0                                           0                  0
Net tapping transactions            0          0                                           0                  0
Open market transactions            0          0                                           0                  0
Repurchase options                  0          0                                           0                  0
24 hour deposit standing facilities               -35             +33                    -17                -37
24 hour credit standing facilities                  0               0                      0                +50
                      Total                    -1,038            +326                   -447               +405




                                                        226
In August and September, months when the surplus increased, negative calls for bids
launched by the Issuing Institution for durations ranging from one week to one month invol-
ved an average amount of 970 MTD, 88 MTD more than the previous period (April-July).
These transactions took place at the same time as banks resorted to deposit facilities for
amounts ranging from 99 MTD to 396 MTD, an average of 48 MTD for the period under
review.
Interbank compartment transactions increased by 8 MTD to 421 MTD, mirroring exactly
trends in forward transactions.
Over the last quarter of 2009, monetary policy operations that were relatively less extensive
than in the previous period led to average tapping of 870 MTD. Intervention by the Issuing
Institution took the form of negative calls for bids for durations ranging from one week to one
month. Because of a gradual decrease in the surplus, the average monthly volume of tapping
in the form of calls for bids fell from 1,155 MTD in September to 763 MTD in December.
Banks had recourse to the Issuing Institution to place their excess liquidity via deposit
facilities in amounts ranging from 54 MTD to 713 MTD. It should be noted that recourse to
these instruments focused on the last 10 days of October, November and December. Banks
too resorted to credit facilities for amounts ranging from 10 MTD to 85 MTD, an average of
32 MTD for the period under review.
Transactions in the interbank compartment grew substantially, from 421 MTD on average to
685 MTD, an increase of 63% from one period to another. This trend was due mainly to that
of forward transactions (+206 MTD or 66%), which continue to dominate with a 76% share of
total transactions.
2. TRENDS IN INTEREST RATES
The day to day weighted interest rate on the money market was particularly dynamic in 2009,
reflecting both banks’ cash position and liquidity position1. In effect, it varied in a range of
between 4% and 5.38%. It should be noted that the latter rate was posted in January, well
before the decision to lower the Central Bank of Tunisia’s key rate by 75 base points and
introduction of deposit and credit facilities. The money market average rate (TMM) was
influenced by the impact of these measures and it gradually fell from 4.70% in January to
4.47% in February and 4.26% in March.
Over the period April-July, liquidity position posted a lower surplus, varying between
705 MTD and 969 MTD. The day to day weighted rate fluctuated in a bracket ranging from
4.04% to 4.50% and the TMM varied between 4.23% and 4.33%.
During August and September, liquidity position grew, posting a surplus of between
839 MTD and 1,150 MTD. The day to day weighted rate was situated in a bracket of between
4.04% and 4.42%. Consequently, the TMM eased somewhat, posting 4.18% in August and
4.24% in September.




1
 The liquidity position is equal to the difference between the total of autonomous factors and the amount of
required reserves.

                                                    227
                         TRENDS IN LIQUIDITY POSITION AND MONTHLY
                                  AVERAGE INTEREST RATE

      (in %)                                                                                (in MTD)
     5.00                                                                                        1,500
     4.90
     4.80                                                                                        1,000
     4.70                                                                                        500
     4.60
     4.50                                                                                        0
     4.40
     4.30                                                                                        -500
     4.20                                                                                        -1,000
     4.10
     4.00                                                                                        -1,500




                           Liquidity Position       Monthly Average Interest Rate


In the last quarter of the year, marked by partial absorption of excess liquidity, liquidity
position was lower, falling from 1,150 MTD in September to 739 MTD in December. The day
to day weighted rate thus varied between 4.05% and 4.80%. Consequently, the TMM was
4.22% in October, 4.29% in November and 4.18% in December.
The savings interest rate, which was 3.25% at the beginning of the year, fell considerably in
February to 2.70%, in line with downward revision of the Central Bank’s key rate. It moved to
2.25% in April and remained there until the end of the year.
C. TRENDS IN ACTIVITY AT BANKS AND OTHER FINANCIAL INSTITUTIONS
1. BANKS1
The opening of 74 new bank branches in 2009 expanded the Tunisian banking system’s
network to 1,209 units, corresponding to one branch for every 8,600 inhabitants, up from
9,100 a year earlier. There were new branches mainly in the greater Tunis area (31), central
eastern Tunisia (15), and the northeast region (10). The electronic banking network was also
strengthened by installation of 163 new cash dispensers (DAB) and automatic teller
machines (GAB), bringing the total to 1,409 such machines. Similarly, 867 new units were
added to the network of transaction processing engines (TPE) in 2009, bringing the total to
10,450 terminals.
a. Banking uses and resources
Banks’ core resources grew more quickly than uses in 2009, requiring greater Central Bank
of Tunisia intervention to tap excess liquidity.
    (i) Uses
Banks’ uses in 2009 were marked by slower growth, mainly as a result of the slower pace in
financing to the economy and a drop in treasury accounts, while claims on the State went up.

1
 The analysis involves Tunisia’s 20 banks: ATB, BFT, BNA, ATTIJARI BANK (formerly BS), BT, AB, BIAT, STB,
UBCI, UIB, BH, CB Onshore, BTK, STUSID BANK, TQB, BTE, BTL, BTS, ABC and BFPME.

                                                  228
USE OF FUNDS AND RESOURCES                                                                            (In MTD)
                                                                                2009
                 Description                      2008
                                                              March         June    Sept.              Dec.
    Financing of the economy                     31,495        32,145       33,060       33,996       34,798
    Claims on the State                           2,495         2,619        2,818        2,876        3,050
    Treasury accounts                             4,764         4,137        3,788        3,706        3,479
    Other net headings                           -1,606        -1,579       -1,554       -1,612       -1,606
          Total uses = Total resources           37,148        37,322       38,112       38,966       39,721
    Monetary and quasi-monetary resources        29,622        30,595       31,233       32,611       33,274
    Special resources                             2,343         2,317        2,278        2,253        2,253
    Provisions                                    2,406         2,514        2,578        2,597        2,646
    Available core funds                          2,777         2,728        3,052        3,177        3,217
    BCT financing                                     0          -832       -1,029       -1,672       -1,669

™ Financing of the economy
Although their share in overall uses went up from 84.8% in 2008 to 87.6% in 2009, bank
loans to the economy rose up at a relatively slower pace of 10.5% (vs. 14.7%), closing for
the year at 34,798 MTD. This trend reflects in particular slower growth in the outstanding
balance of ordinary resources and a drop for the third straight year of loans granted from
special resources. Holdings in the capital of economic and financial units other than banks
posted faster growth.
The outstanding balance of loans from ordinary resources came to 30,961 MTD in 2009,
an increase of 10.8% vs. 16.3% a year earlier. This development was due mainly to trends in
the discount portfolio, the main component (16% or 3,146 MTD compared to 20.5% or 3,352
MTD in 2008) and to a drop in «debit current accounts» (-8.8% or -243 MTD compared to
+16.6% or +394 MTD).
Non-performing loans1 rose in 2009 at about the same rate as in 2008 : 1.4% vs. 1.6%. Their
share in overall loans granted from banks’ ordinary resources fell from 17.8% to 16.3%. It
should be noted that after decreasing in 2007 and 2008, the amount of written-off claims and
those transferred to debt collection companies once again took off on an upward trend,
reaching 208 MTD.
The outstanding balance of loans from special resources continued to drop in 2009, at a
faster pace than the year before : -3.4% vs. -1.9%, reflecting the lower level of loans financed
from external loan funds (-8% or -82 MTD vs. -5.1% or -55 MTD) ; those financed from State
funds were rather up (3.6% or 24 MTD vs. 3.5% or 22 MTD) in the wake of loans granted
mainly, on FONAPRA (+18 MTD) and FOSDA (+8 MTD).
Banks’ securities portfolio rose in 2009 by 18.8% (amounting to 2,204 MTD) vs. 8.9% and
1,856 MTD respectively in 2008. This increase reflects new acquisition of holdings by banks,
mainly in the capital of a number of mutual investment funds, the Tunisian Banking Union
(UTB) now called the Tunisian Foreign Bank (TFB) following restructuring of its capital, the
two competitiveness poles at El Fajja and Bizerte, and a number of other private companies.




1
 These include non-performing loans, doubtful and disputed claims, claims still unpaid after the first and second
notices, as well as negotiated agreements, rescheduling and consolidation.

                                                      229
FINANCING OF THE ECONOMY                                                                       (In MTD)
                                                                           2009
           Description                  2008
                                                       March        June           Sept.       Dec.
Loans from ordinary resources          27,948          28,479       29,389         30,319      30,961
Loans from special resources            1,691           1,675        1,637          1,635       1,633
Securities portfolio                    1,856           1,991        2,034          2,042       2,204
                      Total            31,495          32,145       33,060         33,996      34,798

   ™ Claims on the State
Greatly influenced by the higher level of Treasury bond issues in 2009 along with notable
recovery in the outstanding balance of these bonds in banks’ portfolio (+22.9% or
+474 MTD vs. -12.6% or -297 MTD), State indebtedness to banks shot up by 22.3% vs. a
drop of 11.2% the year before, closing for the year with an outstanding balance of
3,050 MTD. Treasury bond issues amounted to 1,036 MTD in 2009 (vs. 735 MTD in 2008),
while repayments fell from 1,174 MTD in 2008 to 846 MTD in 2009, bringing the overall
outstanding balance of these bonds from 5,972 MTD in 2008 to 6,162 MTD in 2009.
It should be noted that acquisition in June 2009 on the secondary market for the first time by
a Tunisian bank of bonds issued initially by the State on the international financial market,
followed by other acquisitions, contributed to an increase in claims on the State. At the end of
December, the outstanding balance of these bonds came to 119 MTD.
   ™ Treasury accounts
After posting an increase of 38.6% or 1,328 MTD in 2008, treasury accounts went down by
27% or 1,285 MTD in 2009. This decrease reflects mainly the extent to which banks’ ordinary
current accounts at the Central Bank of Tunisia BCT went down, both in dinars
(-976 MTD vs. +937 MTD) in line with greater BCT intervention by means of negative
calls for bids (-1,021 MTD) and in foreign currency (-208 MTD vs. +626 MTD). Aversion to
risk on the part of Tunisian banks in 2008 (with regard to investment of the assets of non
residents abroad) lessened in 2009, following relative stabilisation on markets and
consequently better international financial conditions. It should be pointed out that a
considerable drop in banks’ cash position in January 2009, as reflected in particular in the
level of ordinary current accounts in dinars, (-992 MTD) was attributable in part to the
lowering of the reserve requirement rate as decided by the Central Bank of Tunisia in
December 2008, effective as of 2 January 2009.
TREASURY ACCOUNTS                                                                              (In MTD)
                                                                              2009
                 Description                      2008
                                                                March      June    Sept.        Dec.
Treasury                                            272           271        293         339      284
Ordinary current accounts                         1,325         1,019        633         512      349
Postal current account deposits                       6             5          6           7        9
Foreign currency accounts                         1,879         1,718      1,745       1,764    1,671
Minus : Other BCT financing                          18            20         11          22        2
Bank correspondents (net amount)                  1,239         1,117      1,133       1,011    1,095
Head offices, branches & agencies (net amount)       61            27        -11          95       73
                     Total                        4,764         4,137      3,788       3,706    3,479




                                                 230
(ii) Resources
Banking resources went up in 2009 by 6.9%, compared to 14.7% in 2008. Slower growth
characterised all core resources except available core funds, given that BCT intervention to absorb
excess liquidity by negative calls for bids grew considerably over the period under review.
™ Monetary and quasi-monetary resources
In rising to 33,274 MTD at the end of 2009, monetary and quasi-monetary resources at
banks posted an increase of 12.3% (vs. 15.6% a year earlier), reflecting slower growth in
quasi-monetary resources mitigated by faster growth in monetary resources.
Monetary resources rose by 16.3% in 2009 vs. 12.3% a year earlier, closing for the year at
10,535 MTD. This trend was due mainly to faster growth in residents’ sight deposits (17.8%
vs. 11.7%), in line with the higher volume of deposits by individual companies (20.3% or
389 MTD vs. 1.6% or 29 MTD) and private companies (15.6% or 286 MTD vs. 12.2% or
200 MTD) and recovery in sight deposits by businesses operating in the public sector
(+29.8% or +173 MTD vs. -12.4% or -82 MTD), while deposits by private parties posted
slower growth (14.4% or 372 MTD vs. 28.6% or 575 MTD). Non residents’ sight deposits
grew at a lower rate than the year before (11% or 228 MTD vs. 14% or 256 MTD).
Slower growth in quasi-monetary resources (10.6% vs. 17.1% in 2008) reflects the lower rate
of increase in virtually all categories except resident savings accounts, which posted faster
growth (13.8% vs. 10.2%).
In particular, the outstanding balance of residents’ forward deposits and other financial
products posted slower growth in 2009, dropping from 20.1% in 2008 to 6.5%. Such slower
growth was due to the drop in deposits by private companies (33 MTD vs. 539 MTD) and
private individuals (403 MTD vs. 615 MTD), heightened by the drop in deposits by individual
companies (-210 MTD vs. +174 MTD). At the same time, non resident forward deposits and
other financial products went up moderately, by 3.4% in 2009 vs. 36.6% in 2008.
MONETARY AND QUASI-MONETARY RESOURCES                                                        (In MTD)
                                                                              2009
                    Description                          2008
                                                                  March    June  Sept.         Dec.
Monetary resources                                        9,062    9,265    9,705   10,249    10,535
Residents’ sight deposits                                 6,983    7,181    7,419    7,947     8,227
Non residents’ sight deposits                             2,079    2,084    2,286    2,302     2,308
Quasi-monetary resources                                 20,560   21,330   21,528   22,362    22,739
 of which :
Residents’ forward deposits & other financial products    8,626    8,933    8,967    9,275     9,191
Residents’ savings accounts                               6,659    6,838    6,997    7,354     7,579
Residents’ home savings accounts                          1,168    1,178    1,175    1,190     1,209
Residents’ certificates of deposit                        1,333    1,484    1,688    1,732     1,729
Residents bonds & borrowings with a more than
1 year maturity                                            380      433      317      447        490
Non residents’ forward deposits and other finan-
cial products                                               975      974      968      967     1,008
                       Total                             29,622   30,595   31,233   32,611    33,274

The outstanding balance of residents’ certificates of deposit rose by 29.7% in 2009,
compared to 34.9% in 2008. Slower growth was attributable mainly to the lower increase in
subscriptions by private companies (44 MTD vs. 264 MTD) and social security funds
(39 MTD vs. 64 MTD), the extent of which was mitigated by considerable recovery in
subscriptions by public enterprises other than social security funds (371 MTD vs. -56 MTD).

                                                   231
The outstanding balance of bonds and borrowings with a more than one year maturity held
by residents grew in 2009 by 110 MTD vs. 116 MTD in 2008, due to the high level of
subscription to new issues along with the high volume of bonds falling due (300 MTD and
190 MTD vs. 170 MTD and 54 MTD respectively in 2008). The Bank of Housing and the
Attijari Bank took advantage of BCT’s lower key rate to make early repayment in April and
June 2009 of loans issued in 2008 in the respective amounts of 70 MTD and 50 MTD.
Bonds were issued in 2009 by the International Banking Union UIB (100 MTD), the Bank of
Housing BH (100 MTD), the Tunisian Banking Company STB (50 MTD) and the Bank of
Tunisia and Emirates (50 MTD) for maturities ranging between 10 and 20 years. For these
issues, banks gave subscribers the option of choosing between fixed interest rates ranging
from 5.25% and 6.5% and a variable interest rate set at the money market average rate plus
0.8%.
Recourse by certain banks to bond issues for relatively high amounts and fairly long
maturities were part of efforts to establish an adequacy between uses and resources.
™ Special resources
Special resources continued in 2009 on the downward trend that began in 2007, coming to
2,253 MTD at the end of the year under consideration, a drop of 3.8% (-90 MTD) compared
to -2.9% (-69 MTD) the year before. This reflected lower external loan funds (-10.4% or -151 MTD
vs. -8.6% or -137 MTD) that were however offset by higher State funds (6.7% or 60 MTD
vs. 8.3% or 68 MTD).
™ Available core funds
The large increase in the level of core funds available at banks (15.8% in 2009 vs. 8.7% the
year before) took place in the framework of ongoing strengthening of their financial base, in
preparation for adoption of Basel II prudential norms. Capital increases carried out over the
year under review involved the National Agricultural Bank BNA (80 MTD), the ATTIJARI
BANK (56.25 MTD), the bank to finance small/medium sized businesses BFPME
(50 MTD), the Bank of Tunisia BT (37.5 MTD), the AMEN BANK (33 MTD), the Tuniso-Qatari
Bank TQB (30 MTD) and the Arab Banking Corporation ABC (10 MTD). Issues in cash came
to 241.75 MTD, including an issue premium of some 75 MTD, bringing the outstanding
balance of these premiums to 479 MTD at the end of 2009, an increase of 18.6% vs. 5.5%
the previous year, the rest of the increases being by incorporation of reserves. But the capital
actually raised in 2009 came to almost 159 MTD.
AVAILABLE CORE FUNDS                                                                   (In MTD)
                                                                       2009
                 Description                     2008
                                                          March     June  Sept.         Dec.
(1) Core funds                                   3,852     3,812     4,117     4,250    4,326
 of which : Paid-up capital                      1,786     1,786     1,824     1,866    1,914
            Reserves                             1,306     1,265     1,429     1,440    1,418
            Issue premiums                         404       404       404       424      479
            Subordinated borrowings                347       347       388       448      442
(2) Fixed assets & worthless securities net      1,075     1,084     1,065     1,073    1,109
    of amortisation
            Buildings & furniture                1,347     1,369     1,406     1,429    1,472
            Worthless securities                   369       370       327       325      329
            Amortisation                          -641      -655      -668      -681     -692
Available core funds (1-2)                       2,777     2,728     3,052     3,177    3,217


                                              232
It should be noted that the issue in 2009 of subordinated borrowings by the Amen Bank
(60 MTD), the National Agricultural Bank BNA (50 MTD) and the Arab Tunisian Bank ATB
(50 MTD) brought the outstanding balance of these borrowings to 442 MTD at the end of
2009. The first borrowing, with a 15 year maturity, was issued in two equal portions of
30 MTD, remunerated at a fixed rate of 5.45% for the first portion and at the money market
average rate plus 0.85% for the second portion. The second borrowing was granted at a
fixed interest rate of 5.4%, for a maturity of 15 years. The last borrowing is divided into four
categories, i.e. those of 7 and 10 years that are tied to variable interest rates (the money
market average rate plus 0.5% and 0.75% respectively), while the two other categories with
a maturity of 15 and 20 years are remunerated at fixed rates of 5.7% and 5.9% successively.
The additional 112 MTD assigned in 2009 to reserves (taken from 2008 profits), although
less than the figure recorded the year before (195 MTD), helped bring the total to 1,418 MTD
vs. 1,306 MTD a year earlier. This trend reflected mainly slower growth in extraordinary
reserves (74 MTD vs. 149 MTD in 2008) and a drop in reserves subject to special regime
(-6 MTD vs. +22 MTD), mitigated by consolidation of the level of reserves for tax free
reinvestment (40 MTD vs. 18 MTD).
™ Provisions
The provisioning effort undertaken by banks continued in 2009, bringing the overall level of
provisions to 2,646 MTD at the end of the same year, an increase of 10% vs. 16.7% in 2008.
This trend reflects mainly the combined effect of slower growth in provisions for non-
performing loans (10.9% or 204 MTD vs. 14.7% or 241 MTD) and the drop in provisions for
claims that were not assigned to risks or charges (-69% or -130 MTD vs. +15.4% or +12 MTD).
b. Operation and financial conditions at banks1
In 2009, banks posted increases in virtually all intermediary operating balances compared to
2008 figures, given positive trends in activity and better financial indicators, notably those
concerning portfolio quality. This trend helped banks improve their interest margins by
70.3 MTD or 7.1% (compared to 125.7 MTD or 14.5% the year before), following a drop in
accrued interest and similar charges that was greater than that in interest and similar income.
In effect, interest and similar income went down by a slight 3.8 MTD or 0.2% because of the
drop in proceeds from treasury operations resulting from the drop in interest rates on the
money market. This decrease also had an impact on proceeds from loan operations, which
went up by just 52.7 MTD or 2.7% despite the major 12.8% increase in the average
outstanding balance of loans in 2009. Thus yield on loans came to 6.1%, down from 7% the
year before. There was a 74.1 MTD (6.5%) drop in accrued interest and similar charges, due
essentially to the 47.4 MTD (20.8%) decrease in interest paid on savings deposits.




1
    Provisional figures for 2009.

                                              233
NET BANKING PROCEEDS
                                                                    In MTD           Variation 2009/2008
                     Description
                                                             2008            2009     In MTD      In %
(+) Interest and similar income                              2,123.8     2,120.0         -3.8     -0.2
(-) Accrued interest and similar charges                     1,133.5     1,059.4        -74.1     -6.5
(=) Interest margin                                            990.3     1,060.6         70.3      7.1
(+) Net commissions on banking transactions                    350.2       376.4         26.2      7.5
(+) Net gains on commercial securities portfolio
    and financial transactions                                 259.4       278.7         19.3      7.4
(+) Investment portfolio income                                 83.9        88.7          4.8      5.7
(=) Net banking proceeds                                     1,683.8     1,804.4        120.6      7.2

In parallel with trends in banking activity, net commissions on banking operations rose by
26.2 MTD (7.5%) compared to 29.1 MTD (9.1%) the year before, due in particular to the drop
in transactions relating to foreign trade.
On another front, net gains on the commercial securities portfolio and financial operations
posted growth of 19.3 MTD or 7.4% (compared to 33.4 MTD or 14.8% in 2008), based
mainly on the increase in profits from bank exchange. Income from the investment portfolio
rose by 4.8 MTD (5.7%) vs. 9.1 MTD (12.2%) the year before, coming to 88.7 MTD. Thus net
banking proceeds at banks increased by 120.6 MTD or 7.2% vs. 197.3 MTD or 13.3% in
2008, posting 1,804.4 MTD at the end of 2009. Thanks to the increase in net banking
proceeds, banks pursued their efforts to cover risk by allotting an amount of 353.6 MTD to
provisions for claims in 2009, compared to 402.1 MTD the year before.
The 84.9 MTD or 11.1% increase in banking operating costs (45.9 MTD or 6.4% in 2008)
was due to wage increases in the framework of three-year negotiations, expenditure
committed by most banks in the framework of restructuring of their information systems, and
the growing density of bank branch networks. With operating costs going up more quickly
than net banking proceeds, there was a 1.7 percentage point increase in the operating
coefficient, which posted 47.1% at the end of 2009.
NET FISCAL YEAR RESULT
                                                                   In MTD            Variation 2009/2008
                      Description
                                                                2008     2009        In MTD       In %
Net banking proceeds                                           1,683.8   1,804.4       120.6        7.2
(+) Other operating proceeds                                      25.1      28.9         3.8       15.1
(- ) Operating costs                                             764.7     849.6        84.9       11.1
   * Staff costs                                                 567.0     630.9        63.9       11.3
   * General operating costs                                     197.7     218.7        21.0       10.6
(-) Allocation for amortisation                                   67.9      71.9         4.0        5.9
 (-) Allocation for provisions and result of correction of
     assets on claims (off balance sheet and liabilities)       402.1        353.6     -48.5       -12.1
(-) Allocation for provisions and result of correction of
    assets on investment portfolio                               -2.4         24.0      26.4     1,100.0
(=) Operating result                                            476.6        534.2      57.6        12.1
(+) Balance in gain (+)/loss (-) from other current items        -1.5          4.1       5.6       373.3
(-) Tax on profit                                                80.1         77.0      -3.1        -3.9
(=) Net financial year result                                   395.0        461.3      66.3        16.8
(=) Result after accounting changes                             394.6        461.6      67.0        17.0




                                                    234
Thus banks were able to improve their operating result by 57.6 MTD (12.1%) to 534.2 MTD
at the end of 2009. Net result came to 461.6 MTD, an increase of 67 MTD or 17% over the
2008 figure.
The increase in banks’ net result had a positive impact on the profitability of capital stock
equity, with ROE up from 11.2% in 2008 to 11.7% in 2009, while return on assets remained
at the same level as in 2008, at 1%.
PROFITABILITY AND FINANCIAL SOUNDNESS INDICATORS                                                     (In %)
               Description             2007                                     2008          2009
 Return on equity (ROE)                10.1*                                    11.2           11.7
 Return on assets (ROA)                 0.9*                                     1.0            1.0
 Risk coverage ratio                   11.6                                     11.7           12.4
* Exclusive of deficit results posted by two local banks at end 2007.
Banks continued efforts to strengthen their financial bases by means of operations to
increase capital and this contributed to a 431.3 MTD (11.2%) increase in capital stock equity
to 4,291.5 MTD. As a result of this trend, the average ratio to cover risk went up from 2008 to
2009 by 12.4%.
As for portfolio quality, there were ongoing efforts in 2009 to keep risk down and to have
banks actively deal with non performing loans. This had a positive impact on the share of non
performing loans in total commitments, which fell by 2.3 percentage points to 13,2%, down
from 15.5% at the end of 2008. Net of provisions and reserved charges, this share came to
6%, compared to 7.4% at the end of 2008.
INDICATORS OF BANKS’ PORTFOLIO QUALITY                                                            (In %)
                       Description                                      2007           2008     2009
 Share of non performing loans in total commitments                      17.6          15.5      13.2
 Share of non performing loans net of provisions and
   reserved charges in total commitments                                  9.1           7.4       6.0
 Rate of coverage of non performing loans by provisions
   and reserved charges                                                  53.2          56.8      58.3

The rate of coverage of non performing loans by provisions posted a significant
1.5 percentage point increase to 58.3% at the end of 2009, following a drop in the
outstanding balance of non performing loans and greater effort by banks in the areas of
provisioning and reserving of charges.
2. LEASING COMPANIES1
a. Uses and resources
Activity in the leasing sector was characterised in 2009 by faster growth, following the slower
growth experienced in 2008. In effect, disbursements went up by 23.9% in 2009 (compared
to 12.7% in 2008 and 37.3% in 2007) to 1,019.3 MTD, 95.2% of which was for financing of
moveable goods.




1
    Provisional figures for 2009.

                                                        235
                                                                           (In MTD unless otherwise indicated)
                     Description                           2007                2008                2009
    Disbursements                                      729.8                   822.7             1,019.3
     of which : real estates                            97.6                    43.6                48.8
    Rate of penetration (in %)                          10.2                    10.3                12.6

Thus the sector increased its contribution to financing of the economy by 2.3 percentage
points, while the rate of penetration for leasing rose from 10.3% in 2008 to 12.6% in 2009.
This level of activity was achieved largely on the basis of the six new agencies opened in
2008 and 2009 and the further nine new agencies inaugurated at the beginning of 2010,
bringing the total to 39. This will continue to attract more clients and enhance recourse to
financing through leasing.
Due to disbursement of a higher level of funds, the outstanding balance of leasing went up by
19.9% to 1,655.3 MTD at the end of 2009, with 1,243.9 MTD (75.1%) coming from borrowed
resources. 43.4% of these borrowed resources were from banks and 40.8% from bonds,
insofar as the sector accounted for 31.9% of issues on the bond market in 2009 vs. 42.4% in
2008, given the important level of funds raised in 2009 by banks on this market.
                                                                           (In MTD unless otherwise indicated)
                    Description                            2007                2008                2009
    Outstanding balance of leasing                     1,267.4                 1,381.1            1,655.3
    Capital stock equity1                                170.5                   228.0              288.5
    Loan resources                                       920.0                 1,012.1            1,243.9
    of which : External resources (share in %)            17.7                    12.6                9.6
               Bank resources (share in %)                34.9                    40.2               43.4
               Bond resources (share in %)                36.5                    38.6               40.8

b. Operation
Activity in the sector generated income that was 14.9% higher in 2009, posting 152 MTD,
which helped keep leasing yield at the same 10.2% level as in 2008. This occurred despite
an ongoing drop in the overall effective rate, down by 0.4 percentage point to 11.1%,
because of the competition reigning in the sector.
NET PROCEEDS
                                                              In MTD                    Variation 2009/2008
                      Description
                                                      2008             2009            In MTD         In %
    (+) Proceeds on leasing transactions              132.3            152.0             19.7          14.9
    (+) Factoring income                                0.4              0.3             -0.1         -25.0
    (-) Financial charges                              66.9             70.2              3.3           4.9
    (=) Interest margin                                65.8             82.1             16.3          24.8
    (+) Investment proceeds                             3.4              3.1             -0.3          -8.8
    (+) Other operating proceeds                        2.1              3.0              0.9          42.9
    (=) Net proceeds                                   71.3             88.2             16.9          23.7

Net proceeds went up at a faster pace than income (23.7% or 16.9 MTD), to 88.2 MTD
following an ongoing drop in the cost of borrowed resources for the sector from 7% in 2008
to 6.3% in 2009. This increase in net proceeds led to a two percentage point increase in the
operating ratio to 34.1% in 2009, despite the 16.7% (4.3 MTD) increase to 30.1 MTD. Higher


1
    Taking into account the financial year result.

                                                     236
charges were due to staff costs that went up by 69.8%, following recruitment of 72 people to
put the sector’s manning table at 501 posts, in line with growing activity.
NET FISCAL YEAR RESULT
                                                             In MTD             Variation 2009/2008
                   Description
                                                         2008      2009         In MTD       In %
(=) Net proceeds                                         71.3           88.2       16.9       23.7
(-) Net allocation for provisions                         7.2            6.0       -1.2      -16.7
(-) Operating costs                                      25.8           30.1        4.3       16.7
* Staff costs                                            14.2           17.2        3.0       21.1
* General operating charges                              11.6           12.9        1.3       11.2
(-) Allocation for amortisation                           2.6            2.6        0.0        0.0
(=) Operating result                                     35.7           49.5       13.8       38.7
(+) Balance in gain/loss from other ordinary items        0.4            1.5        1.1      275.0
(-) Tax on profits                                        8.1           11.3        3.2       39.5
(=) Net financial year result                            28.0           39.7       11.7       41.8

Thanks to control of operating costs and reduction of the cost of risk in the wake of
increasing portfolio quality, leasing companies earned profits of 39.7 MTD in 2009, an
increase of 41.8%. This contributed to ever-better profitability indicators in the sector.
                                                                                                   (In %)
           Description                     2007                     2008                  2009
 Leasing yield                               9.7                       10.2               10.2
 ROA                                         1.5                        2.1                2.5
 ROE                                        12.5                       14.0               15.9

c. Financial situation
The sector’s financial situation was marked by ongoing improvement in portfolio quality,
which contributed to meeting the objectives of the central bank of Tunisia for 2009. In fact,
the share of non performing loans fell by 2.7 percentage points to 8.8% and coverage of
these claims by provisions and reserved charges increased by 2.1 percentage points, to
reach 79.4% at the end of 2009.
The leasing sector followed overall prudential rules, especially the solvency ratio that came
to 20% at the end of 2009, despite a sharp increase in the sector’s activity. This took place
following consolidation of capital stock equity through capital increase and mobilisation of
further capital stock equity in the form of subordinated borrowings.
                                                                                               (In %)
                      Description                               2007           2008         2009
 Share of non performing loans                                   17.6           11.5              8.8
 Share of non performing loans net of provisions and
 reserved margins                                                 5.0            2.9              1.9
 Rate of coverage of non performing loans                        75.5           77.3             79.4
 Solvency ratio                                                  15.3           19.8             20.0




                                                   237
3. OFFSHORE BANKS1
a. Uses and resources
Activity at offshore banks in 2009 grew but at a slower pace than the year before. This was
reflected in total assets that went up by 80.4 million US dollars (3.2%) compared to
108.3 million US dollars (4.5%), coming to 2,616.5 million US dollars. This development was
attributable to a slight drop in investment operations at banks, the main activity of offshore
banks. This came to -23.6 million US dollars or -1.9% to 1,240.4 million US dollars or 47.4%
of the total assets, of which almost one third was invested at banks set up in Tunis, i.e.
78.4% of collected resources by the offshore sector in Tunisia vs. 60.5% at the end of 2008.
OFFSHORE BANK USE OF FUNDS
                                                                    In million USD        Variation 2009/2008
                         Description
                                                                   2008        2009       In M$US      In %
    Treasury transactions                                        1,351.5        1,340.7     -10.8      -0.8
      Cash holdings and ordinary accounts                           87.5          100.3      12.8      14.6
    Investment at Banks                                          1,264.0        1,240.4     -23.6      -1.9
      Banks set up in Tunisia                                      310.7          387.1      76.4      24.6
      Banks set up abroad                                          953.3          853.3    -100.0     -10.5
    Loans                                                          841.1          860.7      19.6       2.3
      To residents                                                 540.0          591.4      51.4       9.5
      To non residents                                             301.1          269.3     -31.8     -10.6
    Securities portfolio                                           219.3          310.0      90.7      41.4
    Other uses                                                     124.2          105.1     -19.1     -15.4
                         Total                                   2,536.1        2,616.5      80.4       3.2

Financing operations account for one third of total assets of offshore banks, much like the
year before. Nonetheless, the growth rate went down for the second straight year (19.6 million
US dollars or 2.3% vs. 7.1% at the end of 2008 and 11.7% at the end of 2007) to 860.7 million
US dollars.

                    OFFSHORE BANK USE                                         OFFSHORE BANK USE
                     AT THE END OF 2008                                        AT THE END OF 2009
       Treasury                                Loans             Treasury                                 Loans
     transactions                              33.2%           transactions                               32.9%
        53.3%                                                     51.2%




     Other Uses                             Securities         Other Uses
                                                                                                       Securities
        4.9%                                 portfolio            4.0%
                                                                                                        portfolio
                                              8.6%                                                       11.9%



This drop in the growth rate was due to loans to non residents, which fell by 31.8 million US
dollars or 10.6% to 269.3 million US dollars. Loans to residents went up by 51.4 million US

1
    Provisional figures for 2009.

                                                         238
dollars or 9.5% to 591.4 million US dollars, more than two thirds of the outstanding balance
of loans. The three offshore banks with Tunisian holdings continue to be the most active in
this area, accounting for 91.7% of the outstanding balance of loans.
Their securities portfolio went up significantly (by 90.7 million US dollars or 41.4%) to
310 million US dollars. This was mainly from subscription by three offshore banks in
Treasury bonds issued by Arab countries, in investment funds, and in trade in the securities
of private companies that have set up business in the Gulf countries. The outstanding
balance of subscriptions in bonds issued by the central bank of Tunisia for the State
remained at virtually the same level as the year before at about 69.9 million US dollars.
Financing to residents by offshore banks with Tunisian holdings came to 607.4 million US
dollars or 90.6% of the sector’s overall interventions with residents, vs. 532.2 million US
dollars at the end of 2008. This 14.1% increase reflects the steady contribution of these
banks to financing of the Tunisian economy for the third straight year.
                             Offshore banks with
                                                     Other offshore
                                   Tunisian                                Total offshore banks
                                                         banks
        Description             shareholdings
                                          Share                   Share                    Share
                             In M$US                In M$US                In M$US
                                          (in %)                  (in %)                   (in %)
Loans + shareholdings          829.1        85.8     137.6         14.2            966.7   100.0
 Residents                     607.4        90.6      62.7          9.4            670.1     69.3
 Non Residents                 221.7        74.7      74.9         25.3            296.6     30.7

Surety bonds serving essentially to fund foreign trade between the countries of the Maghreb
went up by a sizeable 472.6 million US dollars or 45.4% to 1,512.6 million US dollars at the
end of 2009, coming mainly from transactions to confirm letters of credit opened for a bank
with Libyan holdings, the most active in this field and accounting for more than two thirds of
overall surety bonds.
SURETY BONDS
                                             In million $E.U             Variation 2009/2008
              Description
                                           2008           2009         In M $E.U       In %
 Total surety bonds                       1,040.0       1,512.6            472.6           45.4
 Confirmation of documentary loans          589.7         923.6            333.9           56.6
 Opening of documentary loans               174.8         260.5             85.7           49.0
 Guarantee and endorsement                  263.8         312.7             48.9           18.5
 Other surety bonds                          11.7          15.8              4.1           35.0

As for resources, client deposits remained the main source of financing for offshore banking
activity, which accounted for 41.4% of overall resources, followed by bank loans with a
33.2% share.




                                             239
         OFFSHORE BANK RESOURCES                                  OFFSHORE BANK RESOURCES
             AT THE END OF 2008                                       AT THE END OF 2009

    Banks’                                Clients’           Banks’                                     Clients’
  investment                              deposits         investment                                   deposits
    34.4%                                  38.5%             33.2%                                       41.4%




    Other                                                    Other
  resources                Provisions   Core funds         resources              Provisions          Core funds
    9.6%                     3.8%         13.7%              6.7%                   4.4%                14.3%


Client deposits grew at a faster pace than the year before (106.6 million US dollars or 10.9%
vs. 76.2 million US dollars or 8.5%), 39.2% of which were resident deposits taken in almost
totally by two offshore banks.
OFFSHORE BANK RESOURCES
                                                              In million USD              Variation
                  Description                                                             2009/2008
                                                             2008       2009          In M$US     In %
Banks’ investment                                             872.9       869.6            -3.3        -0.4
 Banks set up in Tunisia                                      513.2       493.7           -19.5        -3.8
 Banks set up abroad                                          359.7       375.9            16.2         4.5
Clients’ deposits                                             976.6     1.083.2           106.6        10.9
 Resident                                                     277.5       319.3            41.8        15.1
 Non resident                                                 699.1       763.9            64.8         9.3
Capital stock equity                                          348.3       375.0            26.7         7.7
Provisions                                                     96.9       114.8            17.9        18.5
Other resources                                               241.4       173.9           -67.5       -28.0
                       Total                                2,536.1     2,616.5                80.4     3.2

b. Operation
Throughout 2009, the interest margin went down by 9.1 million US dollars or 21.3% to
33.7 million US dollars, following a sharp drop in interest rates on international markets, in
line with the world financial crisis. Still, thanks to a 12.7 million US dollar (186.8%) increase
in income from the investment portfolio to 19.5 million US dollars from gains on sale by an
offshore bank of its holdings in the capital of a bank located abroad, offshore banks were
able to post a slight increase in net banking proceeds in the amount of 2.2 million US dollars
or 2.1% compared to the previous year’s figure, coming to 105.1 million US dollars.




                                                     240
NET BANKING PROCEEDS
                                                                      In million USD         Variation
                    Description                                                              2009/2008
                                                                     2008       2009     In M$US     In %
(+) Interest and similar income                                        99.7       62.1      -37.6      -37.7
(-) Accrued interest and similar charges                               56.9       28.4      -28.5      -50.1
(=) Interest margin                                                    42.8       33.7       -9.1      -21.3
(+) Net commissions on banking operations                              23.6       23.5       -0.1       -0.4
(+) Net gains on commercial securities portfolio
and financial transactions                                            29.7        28.4       -1.3      -4.4
(+) Investment portfolio income                                        6.8        19.5       12.7     186.8
(=) Net banking proceeds                                             102.9       105.1        2.2       2.1

Consequently, the structure of net banking proceeds changed, with an increase in income
from market activity that put it in first place with a 45.6% share, followed by income from
investment and financing operations (32.1%), and those of commercial activity (22.3%).

   NET BANKING PROCEEDS STRUCTURE                                 NET BANKING PROCEEDS STRUCTURE
          AT THE END OF 2008                                             AT THE END OF 2009
      Net                                   Investment               Net                              Investment
 commissions                                  portfolio         commissions                             portfolio
  on banking                                  income             on banking                             income
  operations                                   6.6%              operations                              18.6%
    23.0%                                                          22.3%




 Net gains on                                                   Net gains on
  commercial                                                     commercial
   securities                                                     securities
 portfolio and                                                  portfolio and
    financial                                  Interest            financial                             Interest
 transactions                                   margin          transactions                              margin
      28.8%                                     41.6%                27.0%                                32.1%



The operating ratio remained at about the same level as the year before (28.2%), following
virtual stagnation of net banking proceeds and operating costs, noting that staff costs are
entirely covered by net commissions.
NET FINANCIAL YEAR RESULT
                                                                      In million USD     Variation 2009/2008
                    Description
                                                                     2008        2009    In M$US      In %
Net banking proceeds                                                 102.9      105.1       2.2          2.1
(-) Allocation for provisions and result of correction
of assets on claims off-balance sheet and liabilities                  12.3      20.3       8.0       -65.0
(-)Allocation for provisions and result of correction
of assets on investment portfolio                                       0.0      -0.1      -0.1        -
(+) Other operating proceeds                                            0.0       0.0       0.0        -
(-) Operating charges                                                  29.3      29.6       0.3        1.0
   * Staff costs                                                       19.3      18.7      -0.6       -3.1
   * General operating costs                                           10.0      10.9       0.9        9.0
(-)Allocation for amortisation                                          2.6       2.6       0.0        0.0
(=) Operating result                                                   58.7      52.7      -6.0      -10.2
(+) Balance in gain/loss from other current items                       0.1       0.5       0.4      400.0
(-) Tax on profits                                                      0.6       0.4      -0.2      -33.3
(=) Result of current activities                                       58.2      52.8      -5.4       -9.3
(+) Balance in gain/loss from other extraordinary
items                                                                   0.0       0.0       0.0          -
(=) Net financial year result                                          58.2      52.8      -5.4         -9.3

                                                          241
2009 posted net profits of 52.8 million US dollars vs. 58.2 million US dollars in 2008, given
efforts to build up greater provisioning than the year before to cover the risk of non payment
of certain loans to institutions set up in the Gulf countries. Thus profitability indicators went
down, notably that of capital stock equity.
                                                                                                 (In %)
                    Description                             2007          2008           2009
    ROA                                                      2.1           2.7            2.2
        *
    ROE                                                     13.6          15.7            14
*
    Offshore banks holding legal and financial autonomy.

c. Financial situation
Offshore banks remained in line with prudential rules, especially the solvency ratio, which at
22.6% reflected their operational ability to increase activity and find new markets. Quality of
assets remained satisfactory, with a drop in the share of non performing loans in total
commitments to 10.8% and higher coverage of these assets by provisions and reserved
charges (to 79.6%), in line with central bank of Tunisia objectives for 2009, i.e. a 15% share
for non performing loans and a 70% rate of coverage of these claims by provisions.
                                                                                              (In %)
                            Description                            2007          2008      2009
    Risk coverage ratio                                            23.9           24.2      22.6
    Share of gross non performing loans in total commitments        9.4           11.3      10.8
    Share of non performing loans net of provisions and
    reserved charges in total commitments                           2.7            4.0          2.4
    Rate of coverage of non performing loans by provisions
    and reserved charges                                           73.6           67.7      79.6

4. FACTORING COMPANIES AND MERCHANT BANKS
a. Factoring companies
(i) Uses and resources
The factoring sector in 2009 increased its contribution to management of commercial claims,
in line with the 7.6% rise in the volume of purchased invoices in 2009 vs. 10.4% in 2008 for
a total of 485.4 MTD, of which 83.8% was due to domestic activity.
The outstanding balance of financing went up significantly, at a faster pace than purchased
invoices : 20.7% vs. 5.4% in 2008 to 121.2 MTD at the end of 2009. This disparity in the pace
of growth was due to a shift in business trends in the last quarter of 2009, during which
restructuring of a company in the sector took place, reflected in rotation of financing or ratio of
encashment/disbursements that came to 97.4% vs. 99.5% in 2008.
Intervention by the sector benefitted 640 members for 29,576 buyers in 2009, compared to
566 members and 26,806 buyers a year earlier, nearly the same ratio of buyers to members
as in 2008.




                                                           242
                                                     In MTD            Variation 2009/2008
                 Description
                                             2008             2009    In MTD         In %
Volume of purchased invoices                 451.1            485.4   34.3             7.6
Outstanding balance of financing             100.4            121.2   20.8            20.7
Capital stock equity                          19.6             21.8    2.2            11.2
Loan resources                                68.4             87.5   19.1            27.9
 of which :
  Short term loans from banks (share in %)    22.8             44.3     -             21.5
  Treasury bills (share in %)                 40.2             37.0     -             -3.2
  Debenture loans (share in %)                35.1             18.3     -            -16.8

Activity in the sector was financed mainly by 87.5 MTD in loan resources at the end of 2009,
the structure of which evolved in favour of short term resources in the form of treasury bills
and bank loans, which relayed bond resources to represent 81.3% of overall loan resources.
(ii) Operation
Despite a higher volume of activity, income from factoring in 2009 fell slightly (by 3.8% or
0.5 MTD) to 13.6 MTD, of which 59.6% or 8.1 MTD was from financing commissions
(vs. 61.7% or 8.7 MTD in 2008), and loan yield fell from 8.7% in 2008 to 7.8%. The drop in
financing commissions was due to the combined effect of the downward trend in the sector’s
exit conditions (from 8.7% in 2008 to 8.3% in 2009) and the difference in breakdown of
business trends throughout the year.
                                                 In M T D             Variation 2009/2008
              Description
                                             2008        2007         In MTD         In %
Financing commissions                         8.7              8.1          -0.6      -6.9
(-) Financial charges                         4.7              4.1          -0.6     -12.8
(=) Interest margin                           4.0              4.0           0.0       0.0
(+) Factoring commissions                     5.4              5.5           0.1       1.9
(+) Securities portfolio income               0.2              0.1          -0.1     -50.0
(+) Other operating proceeds                  0.0              0.0           0.0       0.0
(=)Net Factoring proceeds                     9.6              9.6           0.0       0.0

Factoring commissions more or less stagnated at the same level as in 2008 (5.5 MTD), in
line with slower growth in the volume of purchased invoices and the slight drop in the
average factoring commission, down from 1.2% in 2008 to 1.1% in 2009. Although income
from factoring was down, net factoring proceeds stabilised at the same level as in 2008
(9.6 MTD), thanks to a drop in financial charges due to a drop in the cost of the sector’s
resources from 6.5% in 2008 to 5.7% in 2009.
With stagnation in net factoring proceeds and a 22.2% increase in operating costs for a total
of 5.5 MTD, the operating ratio worsened from 46.5% in 2008 to 57.3% in 2009. This
increase was based on staff costs, which rose by 25% to 3 MTD or 55% of operating costs,
under the combined effect of wage increase and additional three staff members for a total of
82, with a supervisory rate of 61%.




                                             243
                                                       In M T D           Variation 2009/2008
                 Indicators
                                                   2008        2009       In MTD         In %
(=) Net factoring proceeds                          9.6             9.6     -0.1            -1.0
(-) Operating costs                                 4.5             5.5      1.0            22.2
     * Staff costs                                  2.4             3.0      0.6            25.0
     * General operating costs                      2.1             2.5      0.4            19.0
(-) Allocation for amortisation                     0.3             0.4      0.1            33.3
(-) Allocation for provisions net of refunds        4.6            -0.3     -4.9          -106.5
(=) Operating results                               0.2             4.0      3.8               -
(-) Taxes                                           1.0             0.7     -0.3           -30.0
(=) Net results                                    -0.8             3.3      4.1               -

Activity in the sector in 2009 generated profits of 3.3 MTD after the losses that marked the
two previous financial years, following a considerably lower provisioning effort (recovery of
0.3 MTD vs. allotment of 4.6 MTD in 2008 required to clear up the portfolio at one of the
companies in the sector). Consequently, indicators for the sector’s profitability improved
significantly.
                                                                                              (In %)
                   Indicators                              2008                    2009
 Return on loans                                             8.7                    7.8
 ROA                                                        -0.8                    3.1
 ROE                                                        -3.7                   17.3

(iii) Financial situation
The quality of the sector’s portfolio improved, with a 4.9 percentage point drop in the share of
non performing loans to 13% at the end of 2009 and an 8 percentage point increase in the
rate of coverage of these claims by provisions and reserved charges to 84.1%.
                                                                                              (In %)
                   Indicators                                 2008                  2009
 Share of non performing loans                                 17.9                  13.0
 Share of non performing loans net of provisions
 and reserved charges                                           5.0                   2.3
 Rate of coverage of non performing loans                      76.1                  84.1
 Solvency ratio                                                19.2                  21.7

At 21.7%, the solvency ratio remained well above the regulatory minimum.
b. Merchant banks
Activity at merchant was marked in 2009 by a drop in business trends, as reflected in income
that fell by 13.6% to 1.9 MTD. Income was largely from remuneration on development
assistance missions to restructure public holdings, such as assistance related to the granting
of the license to run a second and third generation landline and mobile phone
telecommunications network, restructuring of the Tunisian banking union UTB as well as
updating of the value of national oil distribution company SNDP stock, and evaluation of the
SALIM insurance company prior to their posting on the stock exchange.
Net proceeds posted a significant drop of 21.7% to 1.8 MTD, resulting from the decrease in
proceeds from investment and from the financial cost of indebtedness assumed by the two
banks in the sector, following acquisition of their headquarters, partially financed by capital

                                                   244
stock equity. Operating costs showed a drop of just 5.6% to monopolise 94.4% or 1.7 MTD of
net proceeds in the sector, compared to 78.3% in 2008, reflected in a loss of 0.1 MTD in 2009
vs. profits of 0.4 MTD in 2008.

                                                      In MTD            Variation 2009/2008
                 Description
                                               2008            2009    In MTD         In %
Overall operating proceeds                      2.2              1.9    -0.3        -13.6
Net banking proceeds                            2.3              1.8    -0.5        -21.7
Operating costs                                 1.8              1.7    -0.1         -5.6
 - Staff costs                                  0.5              0.7     0.2         40.0
 - General operating costs                      1.3              1.0    -0.3        -23.1
Allocations for provisions and amortisation     0.1              0.1     0.0          0.0
Net results                                     0.4             -0.1    -0.5       -125.0




                                              245
                  III. MONEY AGGREGATES AND THEIR COUNTERPARTS
The financial system’s uses in 2009 were marked by slower growth in financing of the
economy and net claims abroad, while the State’s net indebtedness to the financial system,
was rather up. These trends were reflected in the level of money supply (M3) that, although it
expanded more slowly, continued to grow at a sustained pace.
FINANCIAL SYSTEM RESOURCES1 AND THEIR COUNTERPARTS
                                            MTD                                              Variation (In %)
               Description
                                                         2007        2008        2009     2008/2007 2009/2008
M4 AGGREGATE                                          30,116        34,404      38,761       14.2       12.7
  Money supply, broad sense (M3)                      29,853        34,148      38,591       14.4       13.0
   Money supply, strict sense (M2)                    28,197        32,294      36,497       14.5       13.0
   Money M1                                           11,083        12,393      14,266       11.8       15.1
    Fiduciary money                                    4,099         4,400       5,010        7.3       13.9
    Bank money                                         6,984         7,993       9,256       14.4       15.8
   Quasi-money                                        17,114        19,901      22,231       16.3       11.7
  M3-M2                                                1,656         1,854       2,094       12.0       12.9
  M4-M3                                                  263           256         170       -2.7      -33.6
 OTHER RESOURCES                                      10,831        12,243      13,665       13.0       11.6
 TOTAL RESOURCES=TOTAL COUNTERPARTS                   40,947         46,647     52,426       13.9       12.4
 NET CLAIMS ABROAD *                                   6,592         8,176       9,631    1,584.0    1,455.0
 DOMESTIC LOANS                                       34,355        38,471      42,795       12.0       11.2
  Net claims on the State*                             5,674         5,782       6,735      108.0      953.0
  Financing of the economy                            28,681        32,689      36,060       14.0       10.3
   Loans to the economy                               27,084        30,965      34,011       14.3        9.8
   Securities portfolio                                1,597         1,724       2,049        8.0       18.9
* For these aggregates, variations are expressed in MTD.

A. THE M3 AGGREGATE
In reaching 38,591 MTD at the end of 2009, the M3 aggregate posted a slight drop in its rate
of increase, i.e. 13% vs. 14.4% the year before.
TRENDS IN THE LIQUIDITY RATE OF THE ECONOMY AND THE INFLATION RATE
                                             MTD                                          In %
         YEARS                M3 (annual         GDP (in current         Liquidity rate      Average inflation
                               average)             prices)                (M3/GDP)                rate
           2005                  22,575               41,871                 53.9                  2.0
           2006                  25,374               45,756                 55.5                  4.5
           2007                  28,225               49,874                 56.6                  3.2
           2008                  32,400               55,297                 58.6                  5.0
           2009                  36,458               58,768                 62.0                  3.7
                                  Sources : BCT, Ministry of Development and International Cooperation and INS

In terms of monthly averages, the rate of increase for this aggregate, although low in 2009,
was nonetheless much higher than that of GDP in current prices : 12.5% and 6.3% vs. 14.8%
and 10.9% respectively in 2008. Consequently, the rate of liquidity in the economy rose from
58.6% to 62% from one year to the next. Slower growth in money supply was also noticeable
in the inflation rate, which in terms of averages came to 3.7%, down from 5%, influenced by
the drop in both raw material prices and import prices.


1 As defined in this context, the financial system is made up of the Central Bank of Tunisia, the banks, the Postal
  Cheque Centre (CCP), the leasing companies and the Postal Savings Centre (CEP).
                                                       246
       TRENDS IN INFLATION RATE, AND IN M3 AND GDP GROWTH IN CURRENT PRICES
      (In %)                                                                                          (In %)
     18                                                                                                  18
     16                                                                              M3                  16
     14                                                                                                  14
     12                                                                                                  12
     10                                                                                                  10
      8                                                                             GDP                  8
      6                                                                                                  6
      4                                                                                                  4
      2                                                                            Inflation             2
      0                                                                                                  0
               2000   2001      2002   2003      2004         2005   2006   2007    2008       2009



1. MONEY SUPPLY M2
Money supply (M2) increased more slowly in 2009, at 13% vs. 14.5% a year earlier, reflecting the
contrasting effects of slower growing quasi money and faster growing available money.
Reaching 14,266 MTD in December 2009, the M1 aggregate went up by 15.1% vs. 11.8% in
2008. This development was the result of higher growth in both fiduciary circulation and bank
money.
BANK MONEY AND ITS MAIN COMPONENTS
                                                                      Of which
                             Bank money                                    Sight deposits in postal
    Period                                        Sight deposits at banks       cheque centre
                      MTD        Variation*(%)     MTD      Variation*(%)   MTD      Variation*(%)
2007                   6,984          16.4          6,249        16.0          692          16.9
2008
 March                  7,182           2.8          6,298            0.8           865               25.0
 June                   7,764          11.2          6,922           10.8           815               17.8
 September              7,783          11.4          6,955           11.3           807               16.6
 December               7,993          14.4          6,983           11.7           981               41.8
2009
 March                  8,097           1.3          7,181            2.8            878              -10.5
 June                   8,381           4.9          7,419            6.2            934               -4.8
 September              8,840          10.6          7,947           13.8            867              -11.6
 December               9,256          15.8          8,227           17.8          1,004                2.3
* Compared to the level in December of the previous year.
Fiduciary money went up in a continuous manner in 2009, except in March, October and
December, posting its highest level (5,055 MTD) at the end of November, when there was a
big jump in household expenditure because of the Aid el Idha holiday. It should be pointed out
that the biggest jump (235 MTD or 39% of 2009’s additional envelope) was recorded in July,
notably following payment of wage increases negotiated in 2008, encashment of the second
portion of this increase for 2009, coinciding with the summer season, as well as the advance
granted by the Cereals Board to farmers so that they could meet expenses for the cereals
season. For the year as a whole, this aggregate went up by 13.9%, vs. 7.3% the year before.
Influenced by faster growth in sight deposits at banks, bank money in 2009 posted higher
growth, rising to 15.8% vs. 14.4% in 2008. Sight deposits increased over the period under
                                                        247
review by 17.8% vs. just 11.7% the year before, mainly in line with consolidation of sight
deposits by private parties (+372 MTD), individual companies (+353 MTD), private com-
panies (+286 MTD), and public enterprises other than social security structures (+155 MTD).
Deposits at the postal cheque centre (CCP), after an exceptionally high increase of 41.8% in
2008, recorded slower growth of just 2.3% in 2009.
QUASI-MONEY AND ITS MAIN COMPONENTS
                                                                         Of which
                    Quasi-money          Forward deposits             Certificates of
                                         and other financial                                  Savings deposits
    Period                                                               deposit
                                             products
                              Variat.*              Variat.*                    Variat.*                Variat.*
                   MTD                     MTD                        MTD                      MTD        (%)
                                (%)                   (%)                         (%)
2007               17,114       14.4        7,185       21.5           988           -1.0       7,870      9.6
2008
 March             17,890        4.5        7,516        4.6            916          -7.3       8,113     3.1
 June              18,777        9.7        7,856        9.3          1,384          40.1       8,256     4.9
 September         19,771       15.5        8,278       15.2          1,609          62.9       8,431     7.1
 December          19,901       16.3        8,626       20.1          1,333          34.9       8,708    10.6
2009
 March             20,727        4.2        8,933           3.6       1,484          11.3       8,982     3.1
 June              21,167        6.4        8,967           4.0       1,688          26.6       9,184     5.5
 September         21,917       10.1        9,285           7.6       1,732          29.9       9,624    10.5
 December          22,231       11.7        9,191           6.5       1,729          29.7       9,937    14.1
* Compared to the level in December of the previous year.

In parallel, quasi-money increased in 2009 by 11.7%, compared to 16.3% in 2008, marked
by considerably slower growth in the outstanding balance of forward deposits and other
financial products (6.5% or 565 MTD vs. 20.1% or 1,441 MTD) and to a lesser degree that of
certificates of deposit (29.7% or 396 MTD vs. 34.9% or 345 MTD). Special savings accounts
at banks and at the postal savings centre (CEP) continued to grow in 2009 at a fast clip :
13.7% and 15% vs. 10.2% and 12.2% respectively.
After having posted an ongoing increase over the first eight months of 2009, quasi-money
declined in September and November, as forward deposits by social security structures and
certificates of deposit held by private companies fell due. Quasi-money posted renewed
growth in December, reaching its highest level (22,231 MTD), mainly attributable to a higher
outstanding balance of special savings accounts.
SAVINGS ACCOUNTS
                             Special savings            Savings at the Postal                Other savings
        Period                  accounts                  Savings Centre                        accounts
                             MTD     Variat.* (%)        MTD      Variat.* (%)              MTD    Variat.* (%)
2007                         5,778           7.9              1,835           13.1            257       24.2
2008
  March                      5,923           2.5              1,927            5.0            263        2.3
  June                       6,028           4.3              1,960            6.8            268        4.3
  September                  6,168           6.7              1,990            8.4            273        6.2
  December                   6,365          10.2              2,058           12.2            285       10.9
2009
  March                      6,535            2.7             2,152            4.6            295        3.5
  June                       6,686            5.0             2,195            6.7            303        6.3
  September                  7,034          10.5              2,279           10.7            311        9.1
  December                   7,235          13.7              2,367           15.0            335       17.5
* Compared to the level in December of the previous year.

                                                     248
2. THE “M3-M2” AGGREGATE
The “M3-M2” aggregate continued to rise in 2009 at a sustained pace of 12,9%, up from 12%
the year before. This trend was due mainly to the higher outstanding balance of bonds and
borrowings with a duration of more than one year (29.2% vs. 28.7%), reflecting the high level
of subscriptions, which amounted to 505 MTD in 2009 vs. 280 MTD in 2008. The amount of
bonds falling due came to 307 MTD in 2009 vs. 129 MTD a year earlier.
Bonds issues in 2009 concerned mainly the International Banking Union UIB (100 MTD), the
Bank of Housing BH (100 MTD), the Tunisian Banking Company STB (50 MTD), and the Bank of
Tunisia and the Emirates BTE (50 MTD). An analysis of the structure of bond issues by category
of issuer shows the predominance of lending institutions, which remain the main structures
offering certificate of indebtedness. As for the payment schedules for these borrowings, those
relating to bank issues varied between seven and twenty years, while those relating to issues by
leasing companies were no more than five years for almost all of them. On the basis of these
issues, lending institutions offered subscribers the option of choosing between fixed interest rates
varying between 5.125% and 6.5% (notably for portions with maturity superior to 10 years) and
variable interest rates ranging between money market average rate +0.625% and money market
average rate +1%. It should be pointed out that in 2009 early repayment was made on
borrowings issued by the Bank of Housing (70 MTD) in April and the Attijari Bank (50 MTD) in
June. On the other hand, the outstanding balance of home savings, for the third year in a row,
grew at a slower pace of 3.5%, vs. 4.1% at the end of 2008.
THE «M3-M2» AGGREGATE AND ITS COMPONENTS
                                                                      Bonds &            Savings for
                          M3-M2              Home savings          borrowings for       projects and
    Period                                                        more than one year    investments
                  MTD      Variat.* (%)     MTD    Variat.* (%)   MTD Variat.* (%)     MTD Variat.* (%)
2007              1,656           -3.3     1,122            5.1     527     -17.4       7         16.7
2008
 March            1,654           -0.1     1,131            0.8     516      -2.1       7          0.0
 June             1,820            9.9     1,133            1.0     680      29.0       8         14.3
 September        1,854           12.0     1,145            2.0     701      33.0       8         14.3
 December         1,854           12.0     1,168            4.1     678      28.7       8         14.3
2009
 March            1,922            3.7     1,178            0.9     736       8.6       8          0.0
 June             1,816           -2.0     1,175            0.6     633      -6.6       9         12.5
 September        2,006            8.2     1,190            1.9     807      19.0       9         12.5
 December         2,094           12.9     1,209            3.5     876      29.2       9         12.5
* Compared to the level in December of the previous year.

B. NET CLAIMS ABROAD
Net claims abroad continued to grow throughout 2009, although at a moderate rate, up by
1,455 MTD compared to 1,584 MTD the year before, in the wake of higher net assets in
foreign currency and faster growth in external commitments.
The increase in net assets in foreign currency was attributable mainly to a lower current
deficit and mobilisation of resources in the form of financial drawings and fund transfers,
notably those granted by the European Investment Bank EIB (396 MTD), the African
Development Bank ADB (382 MTD), the French Development Agency AFD (230 MTD), the
International Bank for Reconstruction and Development IBRD (220 MTD), and the
International Financial Corporation IFC in Washington, an affiliate of the World Bank Group
(93 MTD). These resources went mainly to the TAV-Tunisia Company, the TIFERT
                                                     249
Company, the Ministry of Equipment/Housing/Land Planning, the programme to support
integration, and several other companies.
The level of net assets in foreign currency improved in the wake of transfer with respect to
the third landline and mobile phone license to the Divona/Orange France Telecom grouping
(92 MTD), setting up by Indian investors in partnership with the Tunisian Chemical Group of
the phosphoric acid plant TIFERT (67 MTD), financing of the “Tunis Sport City” initiative
(36 MTD), the setting up by “British Gas” of The “Tunisian Processing Company”, an affiliate
in Tunisia (36 MTD), and money provided by the “Gulf Finance House” consortium to the
“Tunis Financial Harbor” Company that is in charge of setting up the Financial Port (34 MTD).
FOREIGN ASSETS AND LIABILITIES                                                                                                          (In MTD)
                    International reserves                                           External liabilities             Net claims abroad
                               Of which :                         Other                              Of which :
   Period                  Foreign currency                      foreign                             Deposits
                 Total           assets                          assets              Total            by non      Amount            Variation*
                             Amount                 Variation*                                       residents
 2007              9,689            9.638              882         2,026             5,123             2,594          6,592                906
 2008
   March           9,835            9.777              139         2,111             5,093             2,632          6,853                261
   June         10,150         10.095                  457         2,317             5,098             2,627          7,369                777
   Sept.        10,849         10.795                 1.157        2,483             5,295             2,835          8,037             1,445
   Dec.         11,742         11.687                 2.049        1,786             5,352             3,127          8,176             1,584
 2009
   March        12,331         12.276                  589         1,923             5,568             3,153          8,686                510
   June         12,300         12.241                  554         1,959             5,738             3,311          8,521                345
   Sept.        13,891         13.341                 1.654        1,684             6,052             3,320          9,523             1,347
   Dec.        13,946 13.397          1.710         2,192                            6,507             3,403          9,631             1,455
* Compared to the level in December of the previous year.

At the end of 2009, net assets in foreign currency came to 13,353 MTD, the equivalent of
186 days of imports, compared to 11,656 MTD and 139 days respectively in December 2008.

                                            NET ASSETS IN FOREIGN CURRENCY
   (In MTD)                                                                                                                             (In days)
   14,000                                                                                                                     186            200

                                                                                                                  139                       180
   12,000                                                                                 157
                                                                                                        141                                 160
   10,000                                                                   122                                                             140
                                                                 107                                                                        120
    8,000
                                                         90
                                                                                                                               13,353




                                            80                                                                                              100
                                                                                                                   11,656




    6,000      74           74
                                                                                                                                            80
                                                                                                         9,582
                                                                                             8,705




    4,000                                                                                                                                   60
                                                                             5,872
                                                                  4,733




                                                                                                                                            40
                                                         3,503
                            2,810



                                            3,011
               2,423




    2,000
                                                                                                                                            20
        0                                                                                                                                   0
              2000         2001         2002            2003     2004       2005         2006          2007       2008        2009

                                        Net assets in foreign currency                          Days of imports


                                                                      250
It should be pointed out that in the framework of support from the International Monetary
Fund (IMF) to member States to help them get out of the financial crisis and to have more
liquidity in reserves, the Fund decided in July 2009 to issue 283 billion US dollars in the form
of special drawing rights (SDRs). Tunisia’s share amounted to some 375 million US dollars
(the equivalent of 496 MTD) divided into two portions, the first encashed in August 2009
(442 MTD) and the second in September (54 MTD). In this framework, IMF asked member
States to enter allocation of these SDRs in accounting as long term external commitments.
C. DOMESTIC LOANS
Posting a total of 42,795 MTD in December 2009, domestic loans went up by 11.2%,
compared to 12% the year before. This trend was led by the lower level of loans to the
economy and the higher level of net claims on the State.
1. NET CLAIMS ON THE STATE
After having recorded significantly slower growth in 2008, net claims on the State picked up
once again in 2009, going up by 953 MTD or 16.5% vs. 108 MTD or just 1.9% a year earlier.
This faster growth reflects strong recovery in the outstanding balance of Treasury bonds in
the portfolio of lending institutions (+488 MTD vs. -297 MTD) and consolidation of the
counterpart of deposits at the postal savings centre (309 MTD vs. 223 MTD). As for the
balance of the Treasury’s current account, although there was no significant change between
December 2008 and December 2009, it evolved in a fairly irregular manner throughout the
year. Its lowest level was recorded in August (123 MTD) after major repayments were made
to draw down foreign debt. Its highest level of the year, in October, came to 1,028 MTD,
essentially in the wake of a high level of tax revenue.
Treasury bond issues brought in a total of 1,036 MTD in 2009, of which 784 MTD were in the
form of bonds equivalent to Treasury bonds (BTA) and 252 MTD in short term Treasury
bonds (BTCT), compared to 735 MTD a year earlier. The amount of repayments fell from
1,174 MTD in 2008 to 846 MTD in 2009 (of which 84% related to bonds equivalent to
Treasury bonds falling due in March 2009), bringing the overall outstanding balance from
5,972 MTD to 6,162 MTD. Subscription to these bonds over the year involved BTA with
varying maturities : 2 years at an average weighted rate of 4.292%, 4 years at 4.358%,
7 years at 4.854%, 10 years at 5.178%, and 15 years at 6.308%. BTCT were issued for
13 week maturity at a weighted monthly rate of 4.023% and for 52 week maturity at 4.243%.
NET CLAIMS ON THE STATE                                                                  (In MTD)
                                                                     Of which
                     Net claims on the State
     Period                                      Treasury current account Treasury bonds at banks
                     Amount        Variation*      Amount    Variation*    Amount      Variation*
 2007                   5,674           509           323        -121         2,365        239
 2008
   March                5,699            25           549         226         2,355         -10
   June                 5,705            31           140        -183         1,959        -406
   September            5,737            63            50        -273         1,931        -434
   December             5,782           108           397          74         2,068        -297
 2009
   March                6,063           281           208        -189         2,194        126
   June                 6,143           361           489          92         2,335        267
   September            6,384           602           320         -77         2,377        309
   December             6,735           953           396          -1         2,556        488
* Compared to the level in December of the previous year.


                                                     251
Recovery in the volume of Treasury issues in 2009 was due to tightening of external
financing conditions caused by the financial crisis and to the excess liquidity that
characterized the banking sector over that same period.
2. FINANCING OF THE ECONOMY
Despite the slower growth that marked national economic activity, loans by the financial
system to the economy went up in 2009 at the brisk pace of 10.3% (compared to 14% in
2008), favoured by more flexible monetary policy and a fluid money market. Slower growth
was attributable mainly to growth in loans from ordinary resources (11% vs. 15.6%)
combined with a drop both in loans from special resources and in the outstanding balance of
Treasury bills (-3.3% and -33.6% vs. -1.9% and -2.7% respectively). The securities portfolio
experienced faster growth of 18.9%, vs. 8%.
FINANCING OF THE ECONOMY
                                                               MTD                    Variation (In %)
               Description
                                              2007             2008     2009      2008/2007     2009/2008
 Loans to the economy                         27,084       30,965       34,011       14.3            9.8
 Loans from ordinary resources                25,102       29,023       32,210       15.6           11.0
 Loans from special resources                   1,719       1,686        1,631       -1.9           -3.3
 Treasury bills *                                 263         256          170       -7.0          -86.0
 Securities portfolio                           1,597       1,724        2,049        8.0           18.9
                        Total                 28,681       32,689       36,060       14.0           10.3
* For this aggregate, variations are expressed in MTD.

Analysis of the structure of loans granted by the financial system continued to show
preponderance of loans granted by banks from their own resources. The intervention of the
Central Bank of Tunisia, on the other hand, focused exclusively on absorption of liquidity, by
negative call for bid transactions.
LOANS TO THE ECONOMY
                                                                MTD                    Variation (In %)
              Description
                                              2007             2008      2009     2008/2007     2009/2008
 Central Bank                                  -198                 0    -1,669      -100.0          -
 Banks                                       26,007            29,577    34,030        13.7         15.1
 Leasing companies                            1,275             1,388     1,650         8.9         18.9
                        Total                27,084            30,965    34,011       14.3           9.8




                                                         252
                                       IV. TOTAL INDEBTEDNESS
In line with slowing economic activity at the national level because of lower external demand
(especially from the euro zone), total indebtedness1 went down considerably, with the growth
rate falling from 10% in 2008 to 7.6% in 2009. This trend involved both State indebtedness
and that of other non-financial economic agents. Growth was slower in external financing
than in domestic financing.
TOTAL INDEBTEDNESS                                                           (In MTD unless otherwise indicated)
                      End of period                                           Variation in %    Structure in %
                                            2007       2008        2009
    Description                                                             2008/07 2009/08 2008          2009
    Domestic indebtedness                  36,874     40,722      44,415      10.4         9.1         67.9      68.8
       -State                               9,696      9,662      10,316      -0.4         6.8         16.1      16.0
       -Other non-financial
         economic agents                   27,178     31,060      34,099      14.3         9.8         51.8      52.8
      From the financial system            32,495     36,491      40,576      12.3        11.2         60.9      62.9
       -State                               5,674      5,782       6,735       1.9        16.5          9.6      10.4
       -Other non-financial
         economic agents                   26,821     30,709      33,841      14.5        10.2         51.3      52.5
      On capital markets                    4,379      4,231       3,839      -3.4        -9.3          7.0       5.9
       *Money market                          263        256         170      -2.7       -33.6          0.4       0.2
         -State                                 0          0           0         -           -          0.0       0.0
         -Other non-financial
           economic agents                    263         256        170       -2.7      -33.6          0.4        0.2
       *Bond market                         4,116       3,975      3,669       -3.4       -7.7          6.6        5.7
         -State                             4,022       3,880      3,581       -3.5       -7.7          6.4        5.6
         -Other non-financial
           economic agents                     94         95          88        1.1       -7.4          0.2       0.1
    External indebtedness                  17,645     19,234      20,098        9.0        4.5         32.1      31.2
       -State                              13,301     14,560      14,716        9.5        1.1         24.3      22.8
       -Other non-financial
         economic agents                    4,344      4,674       5,382       7.6        15.1          7.8       8.4
    Total indebtedness                     54,519     59,956      64,513      10.0         7.6        100.0     100.0
       -State                              22,997     24,222      25,032       5.3         3.3         40.4      38.8
       -Other non-financial
         economic agents                   31,522     35,734      39,481      13.4        10.5         59.6      61.2
Sources : Central Bank of Tunisia, Capital Market Council (CMF) and Ministry of Development and International Cooperation

At the end of 2009, the outstanding balance of domestic indebtedness came to 44,415 MTD,
yielding a growth rate of 9.1% vs. 10.4% a year earlier, influenced by both slower growth in
loans granted by the financial system which remained robust in a context of excessive
liquidity (11.2% vs. 12.3%) and the sharper downturn of financing on capital markets (-9.3%
vs. -3.4%).
As a ratio of total indebtedness, the share of domestic financing rose from 67.9% in 2008 to
68.8% in 2009. This development was led by trends in the domestic indebtedness of other
non-financial economic agents (52.8% vs. 51.8%), while the State’s share remained virtually
unchanged between 2008 and 2009 at 16%.



1
  Total indebtedness is a broad-based financing aggregate that includes all credits (traditional loans or issues on
the money or bond market) contracted by resident non-financial economic agents (including the State), from
either residents or non residents. Excluded from total indebtedness is any financing originating from capital issue
or equity increase.
                                                          253
After having experienced slower growth over the previous two years, the growth rate for the
State’s net indebtedness to the financial system increased considerably in 2009, closing for
the year at 6,735 MTD vs. 5,782 MTD in 2008, an increase of 16.5% vs. 1.9%. This
development was due essentially to strong recovery in the outstanding balance of Treasury
bonds held by banks (+23.6% vs. -12.6%), in relation with an increase in State issues of this
category of bonds for a total of 1,036 MTD (compared to 735 MTD the previous year), with
redemption coming to 846 MTD (vs. 1,174 MTD) over the same period. Still, the volume of
such issues remained at a lower level than in the past, reflecting rational management of
State domestic debt. Thanks to the resources at its disposal, the State had less need to seek
financing on the domestic market to cover its deficit. This amount would have been lower if it
had not been for additional expenditure for investment programmed in the framework of the
supplementary finance law (730 MTD) targeting support to economic activity.
Moreover, the outstanding balance of financing from the financial system to other non
financial economic agents grew more slowly over the period under review (10.2%) after
2008’s exceptional performance, with 14.5% growth recorded at the end of the year,
influenced by slowing economic activity in the wake of falling external demand. But 2009’s
level remained strong compared to previous years against the economic activity
requirements, thanks to abundant supply of liquidity.
Financing mobilised on capital markets continued to diminish for the second straight year,
falling from 4,231 MTD in 2008 to 3,839 MTD in 2009, -9.3% compared to -3.4% in 2008. This
trend was due mainly to the lower outstanding balance of resources mobilised on the bond
market, following the drop in net subscriptions by the public to Treasury bonds (-7.7% vs.
-3.5%), despite the higher volume issued. Similarly, the outstanding balance of debenture
loans issued by other non-financial economic agents went down, influenced by new issues
involving just 20 MTD, down from 29 MTD in 2008, while repayment remained at about the
same level.
Indebtedness on the money market in the form of treasury bills guaranteed by the banking
system continued to decrease in 2009 : -33.6% in 2009 compared to -2.7% in 2008. Drop in
this kind of financing reflects the excessive liquidity prevailing over the past two years.
Recourse by non financial economic agents as a whole to external resources came to
20,098 MTD in 2009, an increase of 4.5% vs. 9% in 2008. This lower growth rate was due to
slower growth in State indebtedness, while that of other non-financial economic agents grew
at a brisker pace.
The State’s external indebtedness (representing 73% of external indebtedness), after posting
a sizeable jump of 9.5% in 2008, went up by just 1.1% in 2009, influenced mainly by
repayment of external debt (notably the debenture loan in euros for an amount of 225 million
euros) combined with the absence of recourse to international financial markets to mobilise
resources in foreign currency. This was due to the instability that continues to reign on these
markets (despite a return of confidence after emergency and bail-out plans were launched to
help the financial system) but also to the fact that the State had resources available to be
sterilised. Thus the State mobilised resources only in the form of bilateral and multilateral


                                             254
borrowings1, mainly from the EIB (383 MTD), the ADB (377 MTD), the French development
agency AFD (230 MTD) and the IBRD (210 MTD).
Growth rate of external financing secured by other non-financial economic agents practically
doubled : from +7.6% in 2008 to 15.1% in 2009, following major drawings on external
borrowings by a number of companies, notably TAV-Tunisie (270 MTD) in the framework of
the Enfidha Airport mega-project, Tunisian Indian Fertilizers (177 MTD), and the Tunisian
electricity and gas company STEG (80 MTD).
As a ratio of GDP in current prices, total indebtedness of the overall non-financial economic
agents (including the State) accounted for 109.8% in 2009 compared to 108.4% a year
before. This trend reflects the slower economic growth (6.3% vs. 10.9%) which was more
pronounced than that of the indebtedness aggregate (up by just 7.6% in 2009
vs. 10% a year before).
On the other hand, external indebtedness as a ratio of gross national disposable income
(GNDI) continued to fall, posting 34.1% at the end of 2009 (vs. 35.1% in 2008), in line with
the targets set in the XIth Plan.
MAIN FINANCING PARAMETERS OF NON-FINANCIAL ECONOMIC AGENTS
                                                         (In % unless otherwise indicated)
                       Description                     2007         2008         2009
Total indebtedness/GDP in current prices               109.3        108.4        109.8
 *State                                                 46.1         43.8         42.6
 *Other non-financial economic agents                   63.2         64.6         67.2
 Domestic indebtedness/GDP                              73.9         73.6         75.6
 *State                                                 19.4         17.5         17.6
 *Other non-financial economic agents                   54.5         56.1         58.0
External indebtedness/GDP                               35.4         34.8         34.2
 *State                                                 26.7         26.3         25.0
 *Other non-financial economic agents                     8.7          8.5         9.2
State domestic indebtedness/Domestic indebtedness       26.3         23.7         23.2
Domestic indebtedness of other non-financial economic
agents/Domestic indebtedness                            73.7         76.3         76.8
External indebtedness /GNDI                             35.5         35.1         34.1
GDP in current prices (in MTD)                        49,874       55,297       58,768
GNDI in current prices (in MTD)                       49,648       54,867       58,863




1
    This concerns financial drawings along with transfer of fund.
                                                          255
                                      V. DISTRIBUTION OF CREDIT

The outstanding balance of loans granted by the financial system to the economy as listed in
the credit and individual loan registries rose from 32.8 billion dinars at the end of 2008 to
36.3 billion dinars at the end of 2009, an increase of 10.6%, 2.6 percentage points lower than
the year before. Slower growth was due to the lower outstanding balance of operating loans.
There were declared loans for almost 296,000 companies and more than 775,000 indivi-
duals, an increase of 13,000 companies and 47,000 private individuals in 2009.
BREAKDOWN OF THE OUTSTANDING BALANCE OF LOANS TO THE ECONOMY BY CATEGORY
OF BENEFICIARY, BY SECTOR AND BY TERM                   (In MTD unless otherwise indicated)
                                          Variation (in %)        Share of total (in %)
      Description       2008    2009
                                      2008/2007     2009/2008        2008         2009
Loans to professionals 25,471  27,560    12.7             8.2         77.6         76.0
  Agriculture &
  fishing1              1,259   1,342     7.6             6.6          3.8          3.7
    Short term            788     810     3.1             2.8          2.4          2.2
    Medium & long term    471     532    16.0           13.0           1.4          1.5
  Industry              9,652   9,943    13.6             3.0         29.4         27.4
    Short term          6,348   6,242    14.2            -1.7         19.3         17.2
    Medium & long term  3,304   3,701    12.6           12.0          10.1         10.2
  Services             14,560  16,275    12.5           11.8          44.4         44.9
    Short term          7,134   7,128    11.1            -0.1         21.8         19.7
    Medium & long term  7,426   9,147    13.8           23.2          22.6         25.2
Loans to individuals    7,344   8,721    15.2           18.8          22.4         24.0
  Consumer loans        2,314   2,240   -17.1            -3.2          7.1          6.1
    Short term          1,998   1,899   -20.5            -5.0          6.1          5.2
    Medium & long term    316     341    13.7             7.9          1.0          0.9
  Housing loans         5,030   6,481    40.5           28.8          15.3         17.9
    Medium & long term  5,030   6,481    40.5           28.8          15.3         17.9
Total                  32,815  36,281    13.2           10.6         100.0        100.0
    Short term         16,268  16,079     6.6            -1.2         49.6         44.3
    Medium & long term 16,547  20,202    20.6           22.1          50.4         55.7

At 16.1 billion dinars in 2009, the outstanding balance of short term loans dropped by 1.2%
vs. an increase of 6.6% the year before. There was a decrease in the outstanding balance of
loans to various sectors of activity except for agriculture and fishing, which continued to grow
but at a slower pace than in 2008. The outstanding balance of medium and long term loans
went up by 22.1% (vs. 20.6% in 2008) to 20.2 billion dinars. Investment loans granted to the
services sector experienced faster growth, while loans to private parties, agriculture/fishing
and industry posted slower growth.
Breakdown of the outstanding balance of loans granted by the financial system by category
of beneficiary shows a 1.6% drop in the share of loans to professionals, coming to 76% in
2009, with a proportionate 1.6% increase in loans to individuals as at the end of 2009. This
was due to a higher share of loans for housing, up by 2.6 percentage points to 17.9%, while
the share of consumer loans dropped by 1 percentage point.


1
    This concerns loans granted directly to farmers and fishermen.
                                                        256
The lower share for loans to professionals in the overall outstanding balance of loans was
due to decreases mainly in the share of industry but also in agriculture/fishing, with
respective drops of 2 and 0.1 percentage points between 2008 and 2009.
There would have been higher growth in loans granted by the financial system to the economy if
it had not been for writing off and transfer of claims by a number of banks to collection companies
for a total of 208 MTD at the end of 2009, compared to 128 MTD in 2008 and 138 MTD in
2007. There was also growing recourse by businesses to issue of treasury bills to reduce the
cost of debt, with volume up from 588 MTD in 2007 to 704 MTD in 2008 and to 693 MTD by
the end of 2009.
Breakdown of the outstanding balance of loans granted by the financial system to public
enterprises, private businesses and individuals shows a slight drop in both the share of public
enterprises (from 6.9% in 2008 to 6.5% in 2009) and that of private businesses (from 70.7% to
69.5%), with the share of individuals up from 22.4% to 24%.
The lower share for public enterprises and private businesses in the overall volume of loans
was mainly in industry. The higher share for private parties, despite the drop in consumer
loans, was due to a major increase in housing loans.
BREAKDOWN OF THE OUTSTANDING BALANCE OF LOANS TO (PUBLIC AND PRIVATE)
COMPANIES AND TO INDIVIDUALS                       (In MTD unless otherwise indicated)
                         2008                   2009                    Variation
                                                                          (in %)
   Description          Medium
                 Short                Short Medium &                  2008 2009
                        & long Total                        Total
                  term                term   long term                2007 2008
                         term
Loans to
professionals    14,270 11,201 25,471 14,180    13,380      27,560     12.7       8.2
  Agriculture &
  fishing           788    471  1,259    810       532       1,342      7.6       6.6
    Public
    companies        20      2     22     21          3         24      0.0       9.1
    Private
    companies       768    469  1,237    789       529       1,318      7.8       6.5
  Industry        6,348  3,304  9,652  6,242     3,701       9,943     13.6       3.0
    Public
    companies       617     72    689    363       288         651     41.2      -5.5
    Private
    companies     5,731  3,232  8,963  5,879     3,413       9,292     11.9       3.7
  Services        7,134  7,426 14,560  7,128     9,147      16,275     12.5     11.8
    Public
    companies     1,151    390  1,541    742       934       1,676     45.4       8.8
    Private
    companies     5,983  7,036 13,019  6,386     8,213      14,599      9.5     12.1
Loans to
individuals       1,998  5,346  7,344  1,899     6,822       8,721     15.2     18.8
  Consumer loans  1,998    316  2,314  1,899       341       2,240    -17.1      -3.2
  Housing loans          5,030  5,030            6,481       6,481     40.5     28.8
Total            16,268 16,547 32,815 16,079    20,202      36,281     13.2     10.6
    Public
    companies     1,788    464  2,252  1,126     1,225       2,351     43.4       4.4
    Private
    companies    12,482 10,737 23,219 13,054    12,155      25,209     10.4       8.6
    Individuals   1,998  5,346  7,344  1,899     6,822       8,721     15.2     18.8




                                               257
The outstanding balance of loans to public enterprises went up by just 4.4% (vs. 43.4% in
2008) to 2,351 MTD in 2009 because of the increase in world prices for certain raw materials.
The slower pace of growth was due to a drop in the outstanding balance of loans to public
enterprises working in industry as well as slower growth in the outstanding balance of loans to
services. On the other hand, the outstanding balance of loans to agricultural and fishing
concerns (essentially the public land bureau OTD) posted higher growth.
The outstanding balance of loans to private businesses grew at a pace that was 1.8 per-
centage point lower, coming to 25.2 billion dinars at the end of 2009. This concerned mainly
the outstanding balance of loans to industry but also that of loans to agriculture and fishing.
Growth in the outstanding balance of loans to private enterprises working in services, on the
other hand, was higher.
The outstanding balance of loans to individuals, which had gone up from 6,373 MTD in 2007 to
7,344 MTD in 2008, reached 8,721 MTD in 2009, for respective increases of 15.2% and 18.8%
over the past two years. Faster growth was due to slower drop in the outstanding balance of
consumer loans, which offset the lower increase in housing loans.
The outstanding balance of loans to businesses that are part of corporate groups went up by
12.5 billion dinars in 2007 to 13.6 billion in 2008, posting 14.4 billion dinars for 2009. Still, the
share of loans to corporate groups in the overall outstanding balance of loans dropped from
43.1% to 41.5% and then 39.7% over the past three years.
Public banks continued to play a dominant role in financing the economy, providing 9.8 billion
dinars or almost 36% of loans to businesses working in the various sectors of activity. In
effect, the national agricultural bank BNA provided more than 58% of loans granted directly
to the agriculture/fishing sector, the Tunisian banking company STB handled 38% of loans to
the tourism sector, and the bank for Housing BH covered almost 16% of loans to the real
estate sector.
The bank to finance small and medium sized businesses BFPME (specialised in loans to
small/medium scale businesses) and the Tunisian solidarity bank BTS (specialised in
microcredit) steadily helped to promote jobs by supporting initiative and encouraging the
setting up of new businesses. Between start up of operation and the end of 2009, BFPME
approved 852 initiatives for overall investment cost of 647 MTD, which helped create more
than 19,000 jobs. BTS approved 119,510 funding requests for an overall amount of
958 MTD, which will help create more than 190,000 jobs.
A. FINANCING FOR AGRICULTURE AND FISHING
Bank financing to agriculture and fishing includes loans granted directly to farmers and
fishermen but also indirect loans granted through structures that market agricultural products
and materials, which take advantage of loans from the financial system but which must
onlend the funds to farmers and fishermen under the same conditions.
The outstanding balance of loans to agriculture and fishing went down by 18.7% (after
increasing by 18% in 2008) to 2,067 MTD in 2009. The drop concerned indirect loans whereas
direct loans went up from 1,170 MTD in 2007 to 1,259 MTD in 2008 then 1,342 MTD in 2009. In
reaching 725 MTD in 2009, the outstanding balance of indirect loans fell by 43.5%, after

                                                258
increasing by 30.4% in 2008. This drop involved loans to structures that market agricultural
products, amounting to 641 MTD in 2009 for a drop of 46.9%, following 2008’s increase of
31.9%. On the other hand, loans to companies that market agricultural materials increased at
the same pace as the year before.
OUTSTANDING BALANCE OF LOANS TO THE AGRICULTURE AND FISHING SECTOR (In MTD)
                                      Short term          Medium & long
                                                                                    Total
           Description                   loans              term loans
                                     2008    2009          2008     2009    2008        2009
 Direct loans                           788         810      471    532     1,259       1,342
 Indirect loans                       1,005         452      279    273     1,284         725
  .Agricultural products
  commercialisation structures        1,005         452      203    189     1,208           641
   of which :
       National Oil Board              100           73      105     97      205            170
       Cereals Board                   713          178        -      -      713            178
       Central Wheat Cooperative        24           26        7      6       31             32
       Central Cooperative for
       Large Scale Cropping             36          51        66     61      102            112
  .Agricultural material marketing
  companies                               -        -          76     84        76          84
                 Total                1,793    1,262         750    805     2,543       2,067

1. SHORT TERM LOANS
Short term loans granted to the agriculture/fishing sector fell by 29.6% to 1,262 MTD in 2009,
after increasing by 21.2% in 2008. This drop involved mainly indirect loans granted to
structures that market agricultural products. On the other hand, loans granted directly to
farmers and fishermen grew at a slightly slower pace. In reaching 452 MTD in 2009, the
outstanding balance of indirect short term loans granted to agriculture suffered sharp
regression of more than 55%, after increasing by almost 40.6% a year earlier.
It should be kept in mind that strong growth the year before was due to the higher
outstanding balance of loans granted to the cereals Board following higher world prices for
cereals, which required greater bank financing, particularly from the BNA in the form of
advances on merchandise to ensure the supply of wheat throughout the country, while also
building up a strategic stock equivalent to four months of domestic consumption, doubling the
two-month stock level used in past years.
The drop in the outstanding balance of operating loans granted indirectly to farmers and
fishermen in 2009 was due to granting by the general equalisation funds of an advance of
almost 300 MTD for equalisation expenses to the cereals Board, which helped reduce its
recourse to short term loans.
The outstanding balance of operating loans granted directly to the agriculture & fishing sector
came to 810 MTD in 2009, an increase of 2.8% vs. 3.1% in 2008. Such slower growth was due
to efforts by the BNA to collect on claims, to favourable agricultural campaign as well as to
sizeable increase in production prices for cereals decided on by public authorities, helping
farmers boost income and honour their commitments to banks.




                                              259
2. MEDIUM AND LONG TERM LOANS
In increasing from 676 MTD in 2007 to 750 MTD in 2008 and 805 MTD in 2009, the
outstanding balance of medium and long term loans to the agriculture/fishing sector posted
7.3% growth vs.10.9% a year earlier. This slower pace was due to both a drop in the
outstanding balance of indirect loans and a slower growth in that of direct loans.
Coming to 273 MTD in 2009, medium and long term loans granted indirectly to the
agriculture/fishing sector were down by almost 2.2% vs. an increase of 3.3% at the end of
2008. This drop involved loans to structures that market agricultural products, while loans to
companies that market agricultural material continued to go up at the same pace as the year
before.
The lower outstanding balance of loans granted to structures that market agricultural
products was due to settlement of scheduled payments on medium and long term loans for
restructuring, held by the national oil board, which were covered by an advance on
equalisation outlays by the general equalisation fund for grain oil activity.
The outstanding balance of medium and long term loans granted directly to farmers and
fishermen came to 532 MTD in 2009, posting an increase of almost 13% vs. 16% in 2008.
Such slower growth was attributable to higher income for farmers following revision of
production prices for cereals, which allowed them to settle scheduled payments on loans to
consolidate farmer debt, as provided for in the presidential measures taken in the framework
of development of cereal crops, along with rescheduling of loans for farmers suffering from
drought during periods of low rainfall.
B. FINANCING FOR INDUSTRY
The outstanding balance of loans to the industrial sector went up by 3% vs. 13.6% in 2008,
posting 9,943 MTD at the end of 2009. This sharp slowdown in growth was due mainly to a
drop in the outstanding balance of short term loans but also the slight slowdown of growth in
that of medium and long term loans.
The outstanding balance of operating loans fell by 1.7% (vs. +14.2% in 2008) to 6,242 MTD
in 2009. This drop involved in particular the outstanding balance of loans granted to
branches of refining (mainly the Tunisian refining industries company STIR, the outstanding
balance of which dipped by 113 MTD), construction activities, textiles/clothing industries,
metallurgy and metal works (notably the Tunisia steelworks company «El Fouledh», the
outstanding balance of which went down by 12.5 MTD), extraction of energy products and
paper/cardboard industries-publishing/printing industries.
Reaching 3,701 MTD in 2009, the outstanding balance of investment loans grew at about the
same pace as the year before : 12% vs. 12.6%. This trend was due to the increase (to
varying degrees) in the outstanding balance of loans to all branches of activity except for
extraction of energy products, leather and footwear industries, rubber/plastics-manufacture of
transport materials, all of which posted lower outstanding balances.




                                             260
BREAKDOWN BY BRANCH OF THE OUTSTANDING BALANCE OF                           LOANS TO THE
INDUSTRIAL SECTOR                                                                 (In MTD)
                                                           Medium & long
                                          Short term loans                          Total
                 Description                                 term loans
                                           2008       2009 2008     2009    2008        2009
  - Energy products extracting                20         7    49       28     69            35
  - Other than energy products extracting     89        92    76       74    165            166
  - Agriculture and foodstuff industries   1,373     1,423   752      843   2,125       2,266
  - Textile and clothing industries          505       481   162      164    667            645
  - Leather and footwear industries           67        75    33       30    100            105
  - Wood and worked products                 143       147    42       41    185            188
  - Paper and cardboard, publishing
    and printing                             246       235   194      229    440            464
  - Coking, refinery, nuclear industries     131        17     3        1    134            18
  - Chemical industries                      457       472   203      226    660            698
  - Rubber and plastic industries            340       352   168      165    508            517
  - Other mineral or metal product
    manufacturing                            481       500   550      629   1,031       1,129
  - Metallurgy and metal work                946       925   220      273   1,166       1,198
  - Machines and equipment
    manufacturing                            201       196    57       57    258            253
  - Electrical and electronic equipment
    manufacturing                            192       205    89      101    281            306
  - Transport material manufacturing         203       200   110      106    313            306
  - Other manufacturing industries           127       126    64       74    191            200
  - Electricity, gas and water
    production and distribution               43        33   129      191    172            224
  - Construction                             784       756   403      469   1,187       1,225
                   Total                   6,348     6,242 3,304    3,701   9,652       9,943

C. FINANCING FOR SERVICES
At almost 16.3 billion dinars in 2009, the outstanding balance of loans to the services sector
rose by 11.8% (vs. 12.5% in 2008). This slower pace of growth was due to the combined
effects of a drop in the outstanding balance of operating loans and the 9.4 percentage point
increase in the outstanding balance of investment loans.
The outstanding balance of short term loans dropped by 0.1% (vs. an increase of 11.1% in
2008) to 7,128 MTD in 2009. This drop was mainly in commerce, automobile repairs, and
household articles, which accounted for 55% of loans to the services sector, but also in
hotel/restaurant and health/social action branches.
The outstanding balance of medium and long term loans came to 9,147 MTD in 2009,
posting 23.2% growth vs. 13.8% in 2008. This faster pace was due to the higher outstanding
balance of loans to most branches, mainly real estate promotion, commerce (notably the
Tunisian oil activities company ETAP), transport and communications (including Tunisair)
and financial activities (management companies dealing in equity securities and leasing
companies).


                                             261
BREAKDOWN BY BRANCH OF THE OUTSTANDING BALANCE OF LOANS TO THE SERVICES
SECTOR                                                                          (In MTD)
                                                     Medium & long
                                    Short term loans                        Total
             Description                                term loans
                                     2008      2009  2008       2009   2008        2009
 - Trade, car repair and household
    items                            4,031    3,927  1,448      1,899  5,479       5,826
 - Hotels and restaurants            1,009      951  2,169      2,339  3,178       3,290
 - Transport and communications        283      323    860      1,144  1,143       1,467
 - Financial activities                337      340    530        753    867       1,093
 - Real estate, renting and service
    to businesses                      990    1,092  1,600      2,079  2,590       3,171
 - Public administration                21       28     60         57     81          85
 - Education                            14       15     33         44     47          59
 - Health and social services           60       45    234        254    294         299
 - Collective, social and personal
    services                           177      224    281        350    458         574
 - Household services                    2        2       2         3      4           5
 - Miscellaneous                       210      181    209        225    419         406
                Total                7,134    7,128  7,426      9,147 14,560      16,275

D. LOANS TO INDIVIDUALS
The individual loan registry showed an overall outstanding balance of loans granted by banks
to households at some 8,721 MTD in 2009 vs. 7,344 MTD in 2008 and 6,373 MTD in 2007,
an increase of 18.8% vs. 15.2% a year earlier. This rise was due to the combined effect of a
lower outstanding balance of short term loans and slower growth in the outstanding balance
of medium and long term loans. Coming to 1,899 MTD in 2009, the outstanding balance of
short term loans fell by just 5%, compared to a more than 20.5% decrease in 2008.
The outstanding balance of medium and long term loans came to 6,822 MTD in 2009,
posting an increase of 27.6% vs. 38.5% a year earlier. Slower growth was due to a lower rate
of increase in the outstanding balance of loans granted to private parties, mainly in the form
of loans for acquisition of new housing and renovation or extension of existing housing, along
with loans for installation of solar water heating, in line with national objectives for use of
renewable energy.
BREAKDOWN BY FINANCING CATEGORY OF THE OUTSTANDING BALANCE OF LOANS
TO INDIVIDUALS                                               (In MTD)
                                                                      Variation in %
           Description                 2008           2009
                                                                 2008/2007     2009/2008
 Short term loans                       1,998         1,899          -20.5            -5.0
 Medium and long term loans             5,346         6,822           38.5            27.6
    Housing                             5,030         6,481           40.5            28.8
    Vehicles                              263           278           11.0             5.7
    Solar water heating                    24            37          140.0            54.2
    Family computer                        28            25           -6.7           -10.7
    University loans                        1             1              -               -
                 Total                  7,344         8,721           15.2            18.8




                                                262
                                       VI. CAPITAL MARKET

Tunisia’s capital market continued to post dynamic activity in 2009, with performance
favoured by excess liquidity on the market and lowering of the central bank of Tunisia’s key
interest rate. This took place in the context of improving world economic conditions, (though
the situation remains uncertain given sovereign risk in advanced countries) largely
attributable to recovery measures that had been introduced. Effective recovery will need to
include a review of these countries’ institutional and operational set-up with respect to the
financial system.
The dynamic activity that characterised the market throughout 2009 was to a large degree
the result of renewed investor confidence in the fortified capability of the Tunisian economy
to stand up to the hazards created by the world financial crisis. Tunisian financial authorities
were quick to react to the first signs of trouble starting the last quarter of 2008 1 and measures
were taken to ensure the stability of the financial system. Confidence in these measures was
further strengthened by the performance of listed companies.
The balance sheet for activity on Tunisia’s capital market was clearly positive for 2009, as
reflected in the record yield of 48.4% (vs. 10.7% in 2008) in the TUNINDEX and its record
level of 4,291.72 points on 31 December 2009, leading to better performance figures for all
stock market indicators. Thanks to TUNINDEX performance, higher equity securities at a
number of listed companies and introduction of the stocks of “Les Ciments de Bizerte” and
SERVICOM companies respectively on the main market and the alternative market of the
official quotation, stock market capitalisation went up by 47.3% to 12,227 MTD at the end of
2009, 20.8% of GDP vs.15% a year earlier.
Corporate recourse to direct financing on the capital market was particularly focused on the
bond compartment, with 675 MTD or 69.2% of the 976 MTD in overall public call for savings,
meaning that the capital market provided 12.1% of financing for private investment, up from
8.1% in 2008. Growth on the capital market was also intensified by its role in mobilising
institutional savings, with the net assets held by 88 mutual funds investing in securities
(OPCVM) coming to 4,380 MTD, an increase of 20.3% in 2009.
Legal infrastructure for direct finance was strengthened by the constitution of a guarantee
fund for clients on the stock and financial product market, meant to protect investors against non
commercial risks by compensating them if a stockbroker should go into forfeiture. The security of
financial relations through better organisation was also enhanced by making authorisation to
exercise portfolio management on behalf of a third party subject to an activity plan and
appropriate human and material means.




1
  Including notably information campaigns carried out by authorities and listed companies, meant to reassure
investors about the financial solidity of listed companies, backed up by the creation of two mutual investment
funds (FCP) for a combined amount of 100 MTD, seeking to counter market volatility.
                                                    263
MAIN STOCK MARKET INDICATORS                                                (In MTD unless otherwise indicated)
                     Description                   2006            2007             2008            2009
    State issues*                                  1,495            1,480              735           1,036
       - BTA and BTZc**                            1,009              945              612             783
       - BTCT**                                      486              535              123             253
    Outstanding balance of Treasury bonds
     (End of period)                               6,074            6,412            5,973           6,162
       - BTA and BTZc                              5,577            5,868            5,850           5,921
       - BTNB**                                       10                0                0               0
       - BTCT                                        487              544              123             241
    Outstanding balance of Treasury
     bonds/GDP (In %)                               13.3             12.9             10.8            10.5
    Corporate issues through public call
     for savings
    Approved amounts                                 426              348              640           1,055
       - Capital increase                            198               94              266             330
       - Debenture loans                             228              254              374             725
    Raised Funds                                     365              489              644             976
       - Capital increase                            164              126              252             301
       - Debenture loans                             151              313              392             675
       - Joint claim funds (FCC)                      50               50                -               -
    Capital market share in financing
     private sector GFCF (In %)                       5.7             6.8              8.1            12.1
    Amount of transactions on the official
     quotation                                       746              915            2,109          1,814
       - Equity securities (a)                       707              836            1,914          1,715
       - Claim securities                             39               79              195             99
    Number of listed companies (In units)             48               51               50             52
    Stock market capitalisation (b)                5,491            6,527            8,301         12,227
    Stock market capitalisation/GDP (In %)          12.0             13.1             15.0           20.8
    TUNINDEX in points (Base 1,000 on
     31 December 1997)                          2,331.05         2,614.07         2,892.40        4,291.72
    Annual rotation rate (a/b) (In %)               12.9             12.8             23.1            14.0
    Liquidity rate (In %)                             52               49               63              58
    Amount of transactions on the off list            39               41               48              40
    Amount of registry and declarations         3,822***              788            1,973           1,470
    Mutual funds investing in securities
     OPCVM (Exclusive of FCPR)****
       - Operating units                                  44             57             76              88
       - Managed assets                                2,639          3,042         3,640           4,388
                                      Sources : Tunis Stock Market (BVMT) and the Capital Market Council (CMF)
* Calculated on the basis of auction dates for public securities.
** BTA : Bonds equivalent to Treasury bonds.
   BTCT : Short-term Treasury bonds.
   BTZc : Zero coupon Treasury bonds.
   BTNB : Treasury bonds negotiable on the stock market.
*** Exclusive of Tunisie Telecom, this volume amounts to 1,555 MTD.
**** FCPR : Venture capital mutual investment funds.

The institutional and legal financial environment was further improved by promulgation in
August 2009 of the code governing provision of financial services to non residents 1. This
move will help Tunisia’s capital market become a major international investment site by
1
  Law n°2009-64 of 12 August 2009 promulgating the code governing provision of financial services to
non residents.

                                                    264
providing a single universal code for financial services rendered to non residents. The
intention is to give foreign investors a clear understanding of the legal framework governing
this field of activity, notably with regard to their rights and responsibilities, with introduction of
the latest enhancements relating to the elaboration of new financial instruments that meet the
needs of non resident investors (expert funds), ethical rules, and protection for these
investors, especially through introduction of a guarantee fund. The code also provides for the
creation of a new offshore compartment at the Tunis Stock Exchange (BVMT) and it
authorizes the financial market council to sign agreements with national regulatory authorities
in the banking and insurance sectors as well as foreign counterparts regarding cooperation
for more effective supervision of non resident investment service providers. This is being
done to ensure that Tunis retains its credibility as a financial hub.
A. CAPITAL MARKET ACTIVITY
1. THE PRIMARY MARKET
The primary market in 2009 was marked by the increase in State issues, along with greater
recourse by businesses to financing on the market.
a. State issues
The volume of State issues went up by 41% to 1,036 MTD for 2009. These issues involved short
term Treasury bonds (BTCT), mainly 52 week bonds and bonds equivalent to Treasury bonds
(BTA). There were no zero coupon Treasury bonds (BTZc) and medium and long term issues
predominated with a 75.6% share (vs. 83.3% in 2008). Diversification continued for issue of
bonds equivalent to Treasury bonds in 2009, with Treasury drawings on three former lines with
maturities of seven, ten and fifteen years for a cumulative amount of 214.1 MTD and opening in
March and August 2009 of four new lines for durations of two, four, seven and ten years.1 Ten
year lines accounted for 50.4% or 394.4 MTD of the overall amount of drawings on bonds
equivalent to Treasury bonds in 2009, with an average duration of domestic public debt of
four years and fifteen days (compared to four years and six months in 2008) for an
outstanding balance of 6,162 MTD at the end of 2009.
Following lowering of the key interest rate in February 2009, weighted average rates for issue of
Treasury bonds ranged between 4.28% for two-year bonds equivalent to Treasury bonds and
5.139% for ten-year bonds equivalent to Treasury bonds. The annual average weighted rate for
issue of short term Treasury bonds was 4.243%, a level that was below the annual average
money market rate (4.304%) vs. an annual average weighted rate of 5.291% and an annual
average money market rate of 5.222% in 2008.
b. Issues by businesses making public call for savings
In 2009, the capital market helped businesses take in 976 MTD through public call for savings,
an increase of 51.6% compared to the amount raised in 2008, due to the higher level of bond
issues following a drop in the cost of indebtedness and to a lesser degree higher capital stock
equity through public call for savings. Consequently, the capital market’s share in financing of
private investment rose to 12.1% in 2009, up from 8.1% a year earlier.


1
    These are lines : 4.3% August 2011, 5% March 2013, 5.25% March 2016 and 5.5% March 2019.

                                                    265
Companies raised 675 MTD in 2009 (vs. 392 MTD in 2008) on the bond market via 20 issues
that were entirely subscribed to. It should be noted that issues cleared by the financial market
council CMF in 2009 involved 22 borrowings for a cumulative amount of 725 MTD, of which
two borrowings were for 50 MTD together, issued at the end of 2009 and closed in January
20101.
Issues of claim securities went mainly to lending institutions, which remained the main issuers
on the bond market with 17 of the 20 issues completed in 2009 for a total of 655 MTD of which
180 MTD were subordinated borrowings, helping to boost additional capital stock equity at three
banks and a leasing company. The remaining three borrowings involved three industrial
companies.
Leasing companies, as usual, issued borrowings for a duration of 5 years, with just one issue for
a 7 year duration, of which 2 years of franchise. Borrowings issued by banks were for longer
periods of up to 20 years.
ISSUES BY BUSINESSES MAKING PUBLIC CALL FOR SAVINGS
                                                      (In MDT unless otherwise indicated)
                                                                        Variation
                 Description                2007 2008    2009
                                                                 2008/2007 2009/2008
 Equity securities issues
   - Number of operations                     18   22      26          4           4
     of which : banks                          2    2       7          0           5
                leasing and factoring          3    5       5          2           0
   - Capital raised through public call for
                                             126  252     301       126           49
   savings
     of which : banks                         93  119     127        26            8
                leasing and factoring          0   23      27        23            4
   - Capital raised without recourse to
                                               8  171      51       163         -120
   public call for savings
     of which : banks                          0   20      32        20           12
                leasing and factoring          0   11       5        11           -6
   - Capital increase by incorporation of
                                              46   45      98         -1          53
 reserves
     of which : banks                         10    6      55         -4          49
                leasing and factoring          9    5       1         -4          -4
 Claim securities issues
   - Raised capital                          313  392     675        79          283
     of which : banks                        197  210     460        13          250
                leasing and factoring        102  163     195        61           32
   - Number of operations                     10   16      22          6           6
     of which : banks                          2    4       7          2           3
                leasing and factoring          7   10      12          3           2
                                                                                                       Source : CMF

Issues made after lowering of the central bank of Tunisia’s key rate to figures ranging between
5.125% and 5.9% for fixed rates (vs. 6.4% to 7.25% in 2008) and between the money market
average rate +0.5% and the money market average rate +1.5% for variable rates (vs. money
market average rate +0.75% to money market average rate +2% a year earlier). Subscribers
showed a slight preference for fixed rates with 192.8 MTD (52.8%) out of an overall amount of
365 MTD offered to subscribers at their choice with either fixed or variable rates.
1
    This is the borrowings issued by ATL (30 MTD) and the subordinated borrowings issued by Attijari Leasing (20 MTD).

                                                          266
Subscriptions to issued debenture loans continued to be dominated by institutional investors,
whose share in overall issues rose to 99.5% in 2009 vs. 96.2% a year earlier. 2009 was marked
by the presence of social security funds for a share of 0.8%.
Two local banks made early repayment on two debenture loans issued in 2008 in the amount of
120 MTD1 following the drop in the interest rate.
In parallel to an increase in their indebtedness on the bond compartment, businesses making
public call for savings increased their recourse to the capital market to boost capital stock
equity in the amount of 301 MTD2 in 2009 vs. 252 MTD in 2008. The amount approved in
2009 was 330 MTD, 24.1% more than a year earlier.
This injection of fresh money through public call for savings brought in 101 MTD for
“Les Ciments de Bizerte” company in the framework of its posting on the stock exchange,
through opening of 20% of its capital to the public. Three local banks also raised funds : the
Attijari bank (56 MTD), the national agricultural bank BNA (70 MTD, of which 45 MTD were
paid in) and the Amen bank (25 MTD).
Off list companies enhanced their financial base by capital increases in cash (reserved
transactions) for 51 MTD3, involving five financial companies and an industrial company.
Capital increases by incorporation of reserves more than doubled, at 98 MTD vs. 45 MTD in
2008.
2. THE SECONDARY MARKET
The outstanding event of 2009 was the addition on the official quotation of the Tunis stock
exchange of two new companies by public subscription bid : “Les Ciments de Bizerte”
company on the main market and the telecommunications and civil engineering infrastructure
work company SERVICOM on the alternative market. Consequently, there were 52 listed
companies at the end of December 2009. The Tunis stock exchange gave its agreement for
admission of the SALIM insurance company on the main market of the official quotation.
A public withdrawal bid was launched by the majority shareholders of the «Palm Beach
Hotels» company for the remaining shares.
Thanks to good performance by listed companies, the TUNINDEX4 once again became
profitable and managed to absorb the 14% in losses over the last quarter of 2008, to finish
for 2009 at a record high of 4,291.72 points. This corresponds to an annual yield of 48.4%
vs. 10.7% a year earlier, keeping in mind that banking shares contributed 28.8% of the
increase in the index.

1
  These are borrowings issued by the bank for housing BH (70 MTD) and the Attijari Bank (50 MTD).
2
  Includes capital increases at BNA (70 MTD) and Tunisie Lait (10 MTD) cleared in 2009, of which a respective
45 MTD and 2.5 MTD were paid in that year, as well as a capital increase at the venture capital investment
company : SODIS SICAR (13 MTD) cleared in 2008 of which one quarter was paid in over 2009.
3
  These capital increases concerned the bank for financing small and medium sized businesses BFPME (50 MTD
of which one quarter was paid in at subscription), ABC (10 MTD), the Tunisian Qatari bank (30 MTD of which 30%
was paid in at subscription), Tunisian credit export agency COTUNACE (12 MTD), Modern Leasing (5 MTD) and
the Sahel mechanical workshops company AMS (3 MTD).
4
  Since 2 January 2009, the TUNINDEX and sectoral indexes have been calculated taking into account not overall
stock exchange capitalisation but floating capitalisation. POULINA stock was integrated in samplings that make
up the TUNINDEX and the sectoral index for financial companies starting 5 March 2009.

                                                    267
Overall sectoral indexes recorded positive performance in 2009, with yields of between
28.2% for the industrial sector’s «building and building materials» branch and 77.8% for the
consumer goods sector’s «automobiles and automotive parts» branch. The financial sector
posted a strong annual yield of 49% (vs. 22.8% in 2008), due mainly to higher banking profits
despite the lower money market average rate, for a 49.7% increase in the TUNBANK index
vs. 14.8% in 2008.

                    DAILY TRENDS IN TUNINDEX AND TUNBANK INDEXES (In points)
     4,500

     4,000

     3,500

     3,000

     2,500

     2,000

     1,500
         Jan 2008    Mar 2008   Jun 2008   Sep 2008   Dec 2008    Mar 2009    Jun 2009   Sep 2009    Dec 2009

                                           TUNINDEX              TUNBANK


The battery of publishable sectoral indexes was enriched in 2009 by the TUNDIS1 distribution
index that is part of the «services to consumers» sector.
The increase in stock exchange indexes was favoured by good performance by 46 of the
52 listed shares, with yields ranging from 0.5% (Tunisie Lait) to 380.8% (SOTUVER). The
remaining shares, however, posted lower prices ranging from -0.3% (ELECTROSTAR) to
-27.8% (Les Ciments de Bizerte).
Along with new introductions on the stock exchange, this performance increased stock
market capitalisation by 47.3% to 12,227 MTD, 20.8% of GDP vs. 15% in 2008. The capital
market had the lion’s share in overall market capitalization with 69.4% or 8,486 MTD at the
end of 2009 (with a 49.6% share for the banking sector) vs. 72.1% at the end of 2008.
TRENDS IN THE MAIN INDICATORS ON THE SECONDARY MARKET
                         Value                2009                                          Variation in %
    Description                                                                            Dec.2008 Dec.2009
                      2007   2008  March  June    Sept.                           Dec.     Dec.2007 Dec.2008
    -TUNINDEX (In points) 2,614.07 2,892.40 3,112.96 3,677.46 4,063.75 4,291.72              10.7       48.4
    -TUNBANK (In points) 1,635.26 1,876.72 2,023.54 2,379.32 2,708.74 2,810.11               14.8       49.7
    -Stock market capita-
     lisation (In MTD)       6,527    8,301    8,842   10,126   11,209   12,227              27.2      47.3
                                                                                              Source : BVMT

The share of foreign investors in stock market capitalisation fell from 24.74% at the end of
2008 to 21.92% at the end of 2009, with 256 MTD in volume of sales vs. 137 MTD in volume of
acquisitions on the official quotation of the stock exchange, for a negative balance of 119 MTD
1
  This index is made up of MONOPRIX, Magasin General, SOTUMAG and ARTES stocks, keeping in mind that
only indexes made up of a minimum of four shares are published, for capitalisation representing more than 2% of
the TUNINDEX.
                                                      268
vs. -48 MTD for 2008. Registry operations carried out on behalf of foreigners yielded a positive
balance of 26 MTD, giving a negative net overall balance of 93 MTD for operations carried out
on behalf of foreign investors in 2009. None of the strategic holdings in the financial sector
were involved in these transfers.
Annual transactions on the stock quotation amounted to 1,814 MTD (of which 1,715 MTD
or 94.5% were on equity securities), a drop of 14% from the 2008 figure, influenced by
679 MTD in block transactions in 2008 vs. just 278 MTD in 2009. Block transactions in 2009
involved mainly SIAME, GIF and UIB stocks. Financial shares were the basis for activity on
the secondary market, with a 61% share in the overall amount of trading in equity securities,
notably UIB (139 MTD), BT (120 MTD), BIAT (91 MTD), Attijari bank (89 MTD), STB
(87 MTD), BH (83 MTD) and Poulina Group Holding PGH (75 MTD).
The level of daily trading came to 7.3 MTD, down from 8.6 MTD in 2008. Exclusive of block
transactions, this average level came to 6.1 MTD in 2009 vs. 5.8 MTD a year earlier. Average
trading on equity securities came to 6.9 MTD a day, with an annual rotation rate of 14% in 2009
vs. 7.8 MTD a day and 23.1% respectively in 2008. Capital trading on the off list compartment
posted 40 MTD in 2009, down from 48 MTD a year earlier. Registry operations and
declarations fell by 25.5% to 1,470 MTD in 2009, involving in particular PGH (817 MTD), TAV
Tunisia (53 MTD) and Nestle Tunisia (35 MTD).
TRANSACTIONS ON THE SECONDARY MARKET                                  (In MTD unless otherwise indicated)
                                                                                    Variation in %
                  Description                      2007      2008      2009
                                                                                2008/2007     2009/2008
  Trading on securities posted on the official
    quotation
  - Equity securities*
    x Traded amounts                                  836     1,914     1,715      1,078         -199
        of which : Block transactions                 278       679       278        401         -401
    x Number of traded securities (In thousands)   69,308   158,243   189,343     88,935       31,100
    x Number of contracts (In thousands)              224       313       395         89           82
  - Claim securities
    x Equity securities                               79        195       99         116           -96
    x Number of traded securities (In thousands)     346     13,651      226      13,305       -13,425
  Trading on the off list
  - Equity securities
    x Traded amounts                                   41        48        37          7           -11
    x Number of traded securities (In thousands)    2,440     2,953     2,969        513            16
  - Claim Securities
    x Traded amounts                                    -         -        3            -           3
    x Number of traded securities (In thousands)        -         -      150            -         150
  Registry and declarations
    x Transactions amounts                           788      1,973     1,470      1,185          -503
* Main market and alternative market.                                                       Source : BVMT

B. ACTIVITIES AT MUTUAL FUNDS INVESTING IN SECURITIES (OPCVM)
The capital market council (CMF) issued authorisations to eight mixed mutual investment
funds (FCP) and three venture capital mutual investment funds (FCPR), bringing the total
number of authorised mutual funds investing in securities (OPCVM) to 106 at the end of
2009, 13 of which dealt in venture capital.
                                                    269
Start up of activity at a bond-type open-end investment company (SICAV) and 11 mixed FCP
brought the overall number of operating OPCVMs with respect to mobilizing of institutional
savings to 98, of which 10 were venture capital funds in 2009, which are important vectors
for mobilising savings and making the capital market more dynamic. The number of
operational OPCVMs1 increased along with a 9.5% increase in the number of stockholders
and shareholders to 46,755 investors holding net assets of 4,380 MTD at the end of 2009,
20.3% more than at the end of 2008.

                             TRENDS IN NUMBER OF OPERATING OPCVM
                                  AND THEIR MANAGED ASSETS
         Operating                                                                           Managed assets
           units                                                                               (in MTD)
         60                                                                                         5,000
         50                                                                                         4,000
         40
                                                                                                    3,000
         30
                                                                                                    2,000
         20
         10                                                                                         1,000

           0                                                                                        0
                     2004       2005         2006          2007         2008           2009
                             Bond units          Mixed units          Managed assets


Out of a sample of 76 companies that handled 98% of the overall net assets of OPCVMs in
2009 (vs. 96% in 2008), an analysis of 2009 activity at OPCVMs shows that bond units were
less dominant than in 2008, down from 92.6%2 in 2008 to 89.8% in 2009.
This drop was due mainly to new units (mostly mixed type) that started activity in 2009 and
2008, notably two major funds set up by banks and insurance companies to help make
Tunisia’s capital market more dynamic and to limit the impact of the world financial crisis.
TREND IN REVIEWED OPCVM ACTIVITY
                              2 008                                               2009
     Description                Bond        Mixed                     Bond         Mixed
                                                          Total                                     Total
                               OPCVM       OPCVM                     OPCVM        OPCVM
    Number of reviewed
    OPCVM                          28          36             64         29             47              76
    Net assets in MTD           3,227         259          3,486      3,864            441           4,305
    Number of shareholders
    and stockholders           38,383       4,071         42,454     41,201         5,335          46,536
    Net assets per share-
    holder or stockholder
    (In thousand dinars)           84          64              82        94             83              93

As for concentration of managed net assets by type of OPCVM, eight bond units handled
80% of the overall net assets of bond units and 10 mixed type companies held 81% of the
net assets of mixed OPCVMs. Average net assets by OPCVMs rose from 54.5 MTD in 2008
to 56.6 MTD in 2009. This trend involved both bond units (with an average of 133.2 MTD in
2009 vs. 115.3 MTD in 2008) and mixed units (9.4 MTD in 2009 vs. 7.2 MTD in 2008).
1
    Exclusive of FCPR.
2
    This does not include two mixed type funds FCP OPTIMA and FCP SECURITE created in October 2008 with
    50 MTD each.
                                                    270
BREAKDOWN OF OPCVM BY SIZE
                                            2008                                          2009
                                                                                                      Average
                                               Average      Share-                          Average
     Description        OPCVM     Net asset                            OPCVM    Net asset              number
                                               net asset    holders                         net asset
                        number     in MTD                              number    in MTD               of Share-
                                                in MTD      number                           in MTD    holders
    1- Bond OPCVM
    < 20 MTD               11         102          9.3          128       9          71            7.9      182
    [ 20 to 60 MTD [        6         223         37.2          370       9         320           35.6      355
    [ 60 to 180 MTD [       5         638        127.6        1,348       3         399          133.0    1,167
    > 180 MTD               6       2,264        377.3        4,670       8       3,074          384.3    4,108
       Sub-total           28       3,227        115.3        1,371      29       3,864          133.2    1,421
    2- Mixed OPCVM
    < 1 MTD                11           5           0.5           11     15           7            0.5       19
    [ 1 to 3 MTD [         13          25           1.9          122     13          24            1.8       94
    [ 3 to 10 MTD [         7          41           5.9          181      9          52            5.8      256
    > 10 MTD                5         188          37.6          220     10         358           35.8      152
       Sub-total           36         259           7.2          113     47         441            9.4      114
    General total          64       3,486          54.5          663     76       4,305           56.6      612

Trend in net assets of OPCVMs accounted for 819 MTD in 2009, 76% of which was due to
the «investor effect»1 vs. 70% in 2008. This trend, 79% or 488 MTD of which was handled by
bond units, shows the degree of investor confidence in this kind of long term savings with a
collection effect of 752 MTD (up by 68% in 2009) vs. 448 MTD (up by 41% in 2008).
The price effect was up by 37% to 199 MTD in 2009. This trend was due to the performance
of mixed OPCVMs (50 MTD in 2009 vs. 17 MTD in 2008), influenced by the performance of
listed shares.
EXPLANATORY IMPACT OF TRENDS IN NET ASSETS OF OPCVM                                                      (In MTD)
                                    2008                                                  2009
       Description            Bond    Mixed         Bond                                   Mixed
                            OPCVM    OPCVM   Total OPCVM                                  OPCVM          Total
 Net assets (end of period)   3,227     259  3,486   3,864                                       441     4,305
 Net assets (beginning of
 period)                      2,773     228  3,001   3,227                                       259     3,486
Total effect                    454      31    485     637                                    182           819
 Investor effect                326      14    340     488                                    132           620
   Collection effect          +432      +16   +448   +618                                    +134         +752
    Subscriptions             4,784     316  5,100   5,364                                    307         5,671
    Buy-backs                -4,352    -300 -4,652  -4,746                                   -173        -4,919
   Distribution effect         -106      -2   -108    -130                                     -2          -132
 Price effect                   128      17    145     149                                     50           199

Mixed OPCVMs thus posted net improvement in average yield, up from 5.18% in 2008 to
14.07% in 2009, brought about by strong growth in the price of listed stocks in 2009. Still,
yield at bond units went down from 4.08% in 2008 to 3.94% in 2009, influenced by a drop in
the money market’s average rate.




1
    Net subscriptions for buy backs and distribution of dividends.

                                                           271
AVERAGE YIELD RATE OF OPCVM1                                                                                               (In %)
    Description       2005                             2006                  2007             2008                  2009
    Bond OPCVM                      4.15                4.09                 4.07              4.08                 3.94
    Mixed OPCVM                     5.46               10.26                 4.02              5.18                14.07
                                                                                                                  Source : CMF

The structure of OPCVM investments remained marked by the predominance of long and
medium term investment in securities, with a 71.8% share vs. 69.2% in 2008.
BREAKDOWN OF ASSETS MANAGED BY OPCVM
                                           2 0 0 8                                             2 0 0 9
                           Bond             Mixed                              Bond             Mixed
      Description                                              Total                                                Total
                          OPCVM            OPCVM                              OPCVM            OPCVM
                                Share     Share     Share     Share     Share     Share
                        MTD           MTD       MTD       MTD       MTD       MTD
                                 in %      in %      in %      in %      in %      in %
    Long term
    securities          2,227    69.0      187    71.7 2,414        69.2 2,748        71.0     345       77.7 3,093        71.8
    Other short
    term securities       176     5.4      10        3.8   186         5.3    237      6.1         14     3.2      251      5.8
    Investment in
    banking
    products              825    25.6      64     24.5     889      25.5      882     22.8         85    19.1      967     22.4
    Total
    managed
    assets              3,228 100.0        261 100.0 3,489 100.0 3,867 100.0                   444 100.0 4,311 100.0

The share of State bonds in the portfolio of bond OPCVMs fell from 68.5% in 2008 to 62.7%
in 2009, leading to greater investment in private bonds, up from 26.6% in 2008 to 32.8% in
2009. This was made possible by the 72% increase in private bond issues in 2009.
40.6% of the portfolio of mixed OPCVMs was in the form of stocks (vs. 31.6% in 2008) and
53.9% in the form of debt securities (vs. 64.2% a year earlier). This was based on the
performance of listed stocks.
BREAKDOWN OF LONG TERM INVESTMENT OF OPCVM                                                                           (In MTD)
                                                               2 0 0 8                                  2 0 0 9
                 Description                      Bond          Mixed                    Bond            Mixed
                                                 OPCVM         OPCVM          Total     OPCVM           OPCVM            Total
    Shares                                          -             59            59             -          140              140
    Corporate bonds                               593             51           644           901           60              961
    Bonds equivalent to Treasury bonds
    (BTA)                                        1,466           64          1,530      1,668              67            1,735
    Zero coupon Treasury bonds (BTZc)               60            5             65         54              59              113
    OPC securities                                 108            8            116        125              19              144
                   Total                         2,227          187          2,414      2,748             345            3,093

Short term investment posted an increase of 143 MTD (+13.3%) to 1,218 MTD, due mainly to
higher investment in short term Treasury bonds : BTCT (60 MTD or 130.4%) and forward
accounts (131 MTD or 52.8%).




1
    This involves yield rates at overall active OPCVM at the end of the year.


                                                           272
BREAKDOWN OF SHORT TERM INVESTMENT OF OPCVM                                  (In MTD)
                                       2 0 0 8                     2 0 0 9
          Description          Bond     Mixed              Bond     Mixed
                                                  Total                      Total
                              OPCVM    OPCVM              OPCVM    OPCVM
Other short term securities     176          10     186     237       14       251
  Treasury bills                131           9     140     137        8       145
  Short term Treasury bonds      45           1      46     100        6       106
Banking products                825          64     889     882       85       967
  Certificates of deposit       404          22     426     364       14       378
  Forward accounts              217          31     248     330       49       379
  Sight deposits                 51           2      53      12        4        16
  Liquidity                     153           9     162     176       18       194
                 Total         1,001         74   1,075    1,119      99     1,218




                                       273
     FINANCIAL STATEMENTS

OF THE CENTRAL BANK OF TUNISIA

       AS AT 31 DECEMBER 2009

AND STATUTORY JOINT-AUDITORS’ REPORT
276
STATUTORY JOINT-AUDITORS’ REPORT




               277
                    STATUTORY JOINT- AUDITORS’ REPORT
                           ON FINANCIAL STATEMENTS

                             AS AT 31 DECEMBER 2009



To the Chairman of the Executive Board of the Central Bank of Tunisia

In compliance with the assignment confided to us by the President of the Republic of
TUNISIA, we have reviewed the Central Bank of Tunisia’s balance sheet and
statement of off balance sheet commitments as at 31 December 2009 as well as the
statement of the results for the period then ended.

The Bank’s Executive Board has finalised the annual accounts and our responsibility
is to give an opinion on these accounts based on our audit.
Our review was carried out in accordance with provisions of (new) article 29 of law
n°58-90 of 19 September 1958 governing the founding and organisation of the
Central Bank of Tunisia, as amended by law n°2006-26 of 15 May 2006, and with
generally accepted auditing standards. These standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts
and disclosures in the financial statements. The procedures selected depend on the
auditor’s judgment, including the assessment of the risks of material misstatements
of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control. An audit
also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.


                                          278
In our opinion, the financial statements give a true and fair view of the financial
position of the Central Bank of Tunisia as at 31 December 2009 and the results of its
operations for the year then ended in accordance with accounting methods for
evaluation and presentation recommended by Tunisian and international accounting
principles, taking into account the specific nature of the Central Bank’s activities and
are consistent with those used the year before. The most significant accounting
principles are described in note II attached to the financial statements.


18 February 2010




                                           279
280
FINANCIAL STATEMENTS


AS AT 31 DECEMBER 2009




          281
                          BALANCE SHEET AS AT 31 DECEMBER 2009


                                                                                     (In dinars)

          ASSETS                                    NOTES     31/12/2009       31/12/2008

Gold holdings                                                    4 394 852        4 412 137
Subscriptions to international organisations          1          2 371 793        2 371 793
IMF reserve position                                  2        42 588 253       38 472 326
Assets and investments in special drawing rights      3       501 914 258       11 708 161
Foreign currency assets                                     13 397 463 081   11 687 458 293
Securities purchased / open market                    4        26 296 700       25 073 300
Advance to the State pertaining to Monetary Funds
subscription                                          5       616 661 533      558 443 905
Standing advance to the State                         6        25 000 000       25 000 000

Reimbursable advance to the State                     7                            553 125
Bills in collection                                   8        32 585 816       30 753 261
Shareholding portfolio                                9        31 650 065       31 390 050
Fixed assets                                                   30 481 678       30 999 768
Miscellaneous debtors                                 10       25 732 926       24 741 146
Memorandum accounts and accounts calling for
adjustment                                            11       25 647 207       10 999 355


                      TOTAL ASSETS                          14 762 788 162   12 482 376 620



THE ATTACHED NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS




                                                    282
                          BALANCE SHEET AS AT 31 DECEMBER 2009

                                                                                       (In dinars)

          LIABILITIES AND EQUITY                       NOTES     31/12/2009       31/12/2008
LIABILITIES

Banknotes & coins in circulation                         12     5 276 088 906    4 641 106 564
Bank and financial institutions current accounts                  381 185 428    1 330 167 571
Government accounts                                      13     1 359 555 247     759 693 263
Commitments towards lending institutions related to      14     1 669 000 000          -
monetary policy transactions
Allocation of special drawing rights                     15      560 733 448       69 784 631
Current accounts in dinar of foreign institutions        16      573 320 850      520 037 080
Commitments in foreign currency towards Tunisian
authorised intermediaries                                17     1 691 022 042    2 029 148 223
Foreign accounts in foreign currency                     18       44 610 581       31 636 157
Other commitments in foreign currency                    19                        13 625 665
Current collection of values                             20       10 971 754       79 192 124
Depositors of bills in collection                        21       34 234 477       40 954 401
Differences on conversion and revaluation                22      151 643 818      160 420 418
Miscellaneous creditors                                  23       16 043 744       15 471 425
Provisions for costs to manufacture banknotes, coins     24         2 894 117      15 820 193
and medals
Other provisions                                                                      842 191
Memorandum accounts and accounts calling for
adjustment                                               25     2 636 831 369    2 232 272 417
TOTAL LIABILITIES                                              14 408 135 781   11 940 172 323
EQUITY                                                   26
Capital                                                             6 000 000        6 000 000
Reserves                                                          90 434 099       89 145 872
Other equity                                                                          116 667
Results carried forward                                              141 757           79 423
TOTAL EQUITY PRIOR TO FINANCIAL YEAR                              96 575 856       95 341 962
RESULTS
Financial year results                                           258 076 525      446 862 335
TOTAL EQUITY PRIOR TO ALLOCATION                                 354 652 381      542 204 297
TOTAL LIABILITIES AND EQUITY                                   14 762 788 162   12 482 376 620


THE ATTACHED NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS


                                                       283
             STATEMENT OF OFF BALANCE-SHEET COMMITMENTS
                            AS AT 31 DECEMBER 2009


                                                                       (In dinars)
                                  NOTES         31/12/2009      31/12/2008

Commitments for guarantee           27         8 446 638 369   9 121 484 048

Debenture loans                                7 737 761 932   8 480 375 044
Other external borrowings                        708 876 437     641 109 004

Commitments on foreign currency
swap transactions                   27

Commitments given                               348 895 824     359 523 938
Commitments received                            257 070 185     271 057 150

Commitments on exchange swap
transactions                        27

Commitments given                                                   944 450
Commitments received                                                942 572




THE ATTACHED NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS




                                         284
                 STATEMENT OF RESULTS AS AT 31 DECEMBER 2009



                                                                                 (In dinars)
                                                     NOTES   31/12/2009    31/12/2008
PROCEEDS
Proceeds from intervention on the money
market                                                         2 018 298     3 470 273
Interest on forward investments in foreign
currency
                                                             156 965 320   351 396 861
Other proceeds on foreign currency
transactions                                          28      94 156 811    54 440 268
Proceeds on transactions with international
organisations
                                                               4 490 988     4 504 067
Interest on claims on the State                                 133 297       149 094
Interest on banks and financial institutions’
accounts                                                        316 154       329 968
Miscellaneous proceeds                                29       4 017 456     2 710 187
Write back of provisions for costs to
manufacture banknotes, coins and medals                       26 726 076     6 518 392
Write back of provisions on securities                             2 046     1 817 133
Gains on exchange/readjustment of foreign
currency accounts                                            129 230 813   164 617 309
TOTAL PROCEEDS                                               418 057 259   589 953 552
COSTS
Costs related to money market intervention                    39 682 316    25 357 729
Interest paid on transactions in foreign
currency                                              30       9 195 693    40 013 995
Other costs on transactions in foreign currency       31      24 006 889    13 473 218
Costs on transactions with international
organisations                                                   620 927      3 523 156
Miscellaneous costs                                              209 063       200 301
Staff costs                                                   44 113 840    40 597 700
General operating costs                                       11 571 985    10 457 656
Costs for banknotes, coins and medals
manufacturing                                                 26 726 076     6 518 392
Allocations for fixed asset depreciation                       3 797 477     2 104 833
Allocation for absorption of costs carried forward                53 333
Allocation for provisions/depreciation of
securities                                                         3 135         2 046
Allocations for other provisions                                               842 191
TOTAL COSTS                                                  159 980 734   143 091 217

FINANCIAL YEAR RESULTS                                       258 076 525   446 862 335



THE ATTACHED NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS




                                                       285
                NOTES RELATED TO FINANCIAL STATEMENTS
                    OF THE CENTRAL BANK OF TUNISIA
                            AS AT 31/12/2009



GENERAL PRESENTATION

The total of the Central Bank of Tunisia’s balance sheet for the year ending 31 December 2009
came to 14,762.8 MTD, compared to 12,482.4 MTD in 2008, an increase of 2,280.4 MTD or
18.3%. Results for the year came to 258.1 MTD vs. 446.9 MTD in 2008, a drop of 188.8 MTD
or 42.2%.
As for asset entries, foreign currency assets posted an increase of 1,710 MTD (14.6%),
reaching 13,397.5 MTD compared to 11,687.5 MTD in 2008. This increase was attributable
in particular to drawings on external loans from international and regional financial institutions
in the framework of financing of a number of development initiatives as well as income from
tourism and foreign direct investment.
Assets in special drawing rights went up by 490.2 MTD to 501.9 MTD, compared to 11.7 MTD in
2008. This increase was due mainly to allocation of SDRs granted by the International
Monetary Fund to Tunisia. This amounted to 238.5 million SDRs (212.4 million SDRs as
general allocation and 26.1 million SDRs as special allocation) after IMF decided in July 2009
to issue the equivalent of 283 billion US dollars in the form of special drawing rights to
provide member states with greater reserve liquidity to help them counter the effects of the
financial crisis.
The advance to the State for subscription to monetary funds went up by 58.2 MTD from the
2008 figure, the result of revaluation of Tunisia’s participation in the International Monetary
Fund on the basis of the new rate between special drawing rights and the dinar set by IMF
on 30 April 2009. The value of the SDR against the dinar appreciated by 9.7% compared to
its value on 30 April 2008. Appreciation of SDRs against the dinar also influenced the line
entitled «IMF reserve position», which went up by 4.1 MTD to 42.6 MTD, compared to 38.5 MTD
in 2008.
«Memorandum accounts and accounts calling for adjustment» posted an increase of 14.6 MTD
compared to 2008, largely due to higher interest to be received on securities in foreign
currency. This interest is recorded in adjustment accounts, in line with the accrued proceeds.
For liability entries, banknotes and coins in circulation went up by 635 MTD, from 4,641.1 MTD in
2008 to 5,276.1 MTD in 2009. The rate of increase rose from 6.7% in 2008 to 13.7% in 2009.
The outstanding balance of commitments to lending institutions tied to monetary policy
transactions came to 1,669 MTD on 31 December 2009, reflecting the surplus in banking
liquidity that marked 2009, which required that the Issuing Institution intervene on the
monetary market to absorb excess liquidity, essentially by means of negative calls for bids. It
should be pointed out that the average volume of liquidity recovered by the Central Bank
doubled, up from 418 MTD in 2008 to 844 MTD in 2009. Consequently, but also under the
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influence of the lower reserve requirement rate introduced at the beginning of the year, the
balance of bank and financial institution accounts fell by a considerable 949 MTD, posting
381.2 MTD at the end of 2009 vs. 1,330.2 MTD as at 31 December 2008.
Government accounts were up by 599.9 MTD, due mainly to resources mobilised via
external borrowing by the State, recorded in «special accounts in foreign currency» the
balance of which rose by 428 MTD, along with encashment of proceeds from the sale of the
third (third generation) landline and mobile phone licence in the amount of 187.3 MTD,
entered under «miscellaneous Government accounts». It should be noted that the balance of
the Treasury’s current account remained at the same level as in 2008 : 396 MTD.
«Memorandum accounts and accounts calling for adjustment» rose by 404.6 MTD, due
mainly to the fact that the share of Central Bank profits for 2008 that reverts to the State
(432 MTD) remained in these accounts, pending the Ministry of Finance request for transfer
of funds. Moreover, essentially because of appreciation of the euro against the dinar,
revaluation of accounts labelled in foreign currency generated a gain of 119.2 MTD, in
addition to the 160 MTD from the previous year. To make provision for hedging the risk
inherent in exchange rate fluctuations over 2010, 150 MTD were retained in the «differences
on conversion» account and the remaining 129.2 MTD were integrated in results for the year,
compared to 164.6 MTD in 2008.
As for the statement of results, interest on investment in foreign currency recorded a sharp
drop of 194.4 MTD (55.3%). This was caused in particular by low interest rates and to a
lesser degree the pursuit of the prudent strategy in managing foreign currency reserves,
giving more weight to security than to yield in the investment. Other proceeds on transactions
in foreign currency, on the other hand, recorded an increase of 39.7 MTD, attributable largely
to gains on foreign exchange for current transactions, up from 11.3 MTD in 2008 to
49.4 MTD in 2009, an increase of 38.1 MTD.
As for financial charges, interest paid on transactions in foreign currency dropped, influenced
in particular by the significant decrease in interest on loans on the money market in foreign
currency (-30.5 MTD), due mainly to lower interest rates on the main foreign currencies in
2009.
Transactions on the money market generated net charges of 37.7 MTD vs. 21.9 MTD in
2008. This reflects the excess banking liquidity that marked 2009, leading the Issuing
Institution to intervene throughout the year to absorb excess liquidity, notably by means of
negative calls for bids.
Operating costs rose by 4.6 MTD, from 51.1 MTD in 2008 to 55.7 MTD in 2009. Staff costs
went up by 3.5 MTD and general operating costs by 1.1 MTD.
I. LEGAL FRAMEWORK AND ACCOUNTING REFERENTIAL
The Central Bank of Tunisia’s financial statements are drawn up in conformity with the terms
of law n°58-90 of 19 September 1958 governing its founding and organisation (as modified in
subsequent texts) and Tunisian accounting standards, taking into account the specific nature
of the Central Bank’s activities.


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Central Bank of Tunisia financial statements include
 - a balance sheet,
 - a statement of off balance sheet commitments,
 - a statement of results, and
 - notes related to the financial statements.
II. ACCOUNTING PRINCIPLES AND RULES OF ASSESSMENT
1) Gold holdings
The Bank’s gold holdings are assessed at the official price for gold as per decree-law
n°64-18 of 28 September 1964, which defines the dinar. Article 2 of this decree specifies that
«official parity for the dinar is set at 1.69271 gram of fine gold for one dinar». Thus a gram of
fine gold is worth 0.590768649 dinar. Following devaluation of the dinar in 1986, as per
decree n°86-785 of 18 August 1986, the official price for gold became 0.6498475 dinar for
one gram of fine gold.
2) Assets and liabilities in foreign currency
Assets and liabilities labelled in foreign currency are converted to dinars at «accounting
reference rates» that remain valid for a period of one month. Accounting reference rates
represent average rates ([bid rate + offer rate] / 2) set by the Central Bank of Tunisia on the
last working day of each month.
Assets and liabilities labelled in foreign currency are revalued at the end of each month.
Latent losses and gains resulting from monthly revaluation are entered under the balance
sheet account «differences on conversion».
3) Assumption of proceeds and costs
3.1 The entering of proceeds and costs is based on the accounting principle of
«independence of financial years». Thus proceeds and costs accruals are recognised in the
accounting year in which they were acquired or due.
3.2 Proceeds and costs resulting from transactions in foreign currency are converted into
dinars at the rate of exchange in effect on the day of the transaction.
3.3 At the end of the period, the balance of the account «differences on conversion» is
processed as follows:
 - Debit balance : The total amount of the balance is entered as a cost for the financial year.
  - Credit balance : The only amount entered on the statement of results as gain on exchange
for adjustment of accounts in foreign currency is that remaining after assessing the portion of
the above-mentioned balance to be carried forward to the subsequent financial year to hedge
against any possible losses on exchange to be entered for that financial year.
3.4 Differences between the exchange rates in effect on the day of the transaction and
accounting reference rates are entered on the statement of results as gains or losses on
exchange. Such gains and losses, in effect, result from actual transactions.

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4) Fixed assets
Tangible and intangible fixed assets are accounted for by applying the rule of «historic cost»,
that is to say the cost of acquisition or the actual amount disbursed to cover costs in the case
of construction. Aside from land, fixed assets are to be depreciated in a straight-line method
over the projected lifespan of the fixed asset by applying the usual rates for each category of
fixed asset. For certain equipment that is specific to the Central Bank of Tunisia (such as
cash register equipment), lifespan and applied depreciation rate are determined by reference
to the experience of their users. Tangible fixed assets involve mostly land, buildings,
technical equipment, computer hardware, cash register equipment, transport material, and
office equipment. Intangible fixed assets are made up mainly of computer software.

5) Securities in foreign currency
Securities labelled in foreign currency that are part of «foreign currency assets» are
assessed at market price on the closing day of the financial year. Latent losses from the
difference between accounting value (possibly corrected by depreciation of premiums and
discounts) and market value of securities are recorded as provisions for depreciation. Latent
gains are not recorded.

6) Securities in dinar
Securities in dinars purchased in the framework of open market transactions are assessed at
market price on the balance sheet’s closing date. Latent losses or gains resulting from
revaluation are entered in the balance sheet account «differences on revaluation».

7) Shareholding portfolio
The Central Bank of Tunisia’s shareholding portfolio is made up of securities that it has
acquired in the framework of article 53 of its articles of assiciation that represent its share in
the capital of a number of non resident organisations and companies as well as resident
companies that manage common banking services. These shares are recorded at the price
of acquisition.

III – DETAILED EXPLANATION OF THE HEADINGS IN THE FINANCIAL STATEMENTS
NOTE 1 : SUBSCRIPTIONS TO INTERNATIONAL ORGANISATIONS
The amount recorded under this heading represents the total of sums paid by the BCT to
certain international financial organisations as shares subscribed to in gold or foreign
currency by the Republic of Tunisia in the capital of these institutions as per prevailing
legislation authorising the Central Bank to enter these shares under the assets heading of
the Bank’s balance sheet. The date of the last transaction entered in this framework goes
back to 1969. The State has since then taken responsibility for all subscriptions, whether in
local or foreign currency.




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The following institutions are involved :
                                                                                       Subscribed amount
                                 Institution
                                                                                              (In TND)1
    International Bank for Reconstruction and Development                                         215 408
    International Development Association                                                          87 202
    International Financial Corporation                                                            76 808
    African Development Bank                                                                    1 992 375
NOTE 2 : IMF RESERVE POSITION
The amount recorded under this heading (42.6 MTD)2, represents the counter value in dinars
of the portion of Tunisia’s shares subscribed to in foreign currency (20.2 million SDRs) in the
capital of IMF. This represents the difference between Tunisia’s full share (286.5 million
SDR) and IMF’s holdings in dinars, held in its account n°1 on the books of the Central Bank
of Tunisia. As for assets in foreign currency, the IMF reserve position is part of Tunisia’s
international reserves. In effect, if support for the balance of payments is required, these
reserve assets labelled in SDRs can be withdrawn from IMF without any prior conditions,
converting them to the most freely convertible currencies.
NOTE 3 : ASSETS AND INVESTMENT IN SDRS
This heading includes :
 - the balance of the SDR account opened in the name of the Central Bank of Tunisia (BCT)
on the books of the IMF, which on 31 December 2009 came to 241.8 million SDRs (the
equivalent of 497.1 million dinars3).
 - the amount in SDRs represents the Central Bank of Tunisia’s contribution to the
PRGF4-HIPC5 fiduciary fund administered by the International Monetary Fund, which
amounted to 2.4 million SDRs, the equivalent of 4.9 million dinars3.

                                                                                        2009                 2008
    ASSETS AND INVESTMENT IN SPECIAL DRAWING RIGHTS                                501 914 258            11 708 161

     Assets in Special Drawing Rights                                              497 059 608             6 895 389
     Investment in Special Drawing Rights                                            4 854 650             4 812 772


NOTE 4 : SECURITIES PURCHASED IN THE FRAMEWORK OF OPEN MARKET
TRANSACTIONS
This heading posted a slight increase of 1.2 MTD compared to 2008, following gains on
revaluation of the relevant securities that took place on 31 December 2009.




1
  This concerns the counter-value in TND of amounts subscribed in gold or in foreign currency at historic exchange rates.
2
  1 TND = 0.475454 SDR, as per IMF quotation in effect since 30 April 2009.
3
  1 SDR = 2.055657 TND as of 31/12/2009.
4
  Poverty Reduction and Growth Facility.
5
  Heavily Indebted Poor Countries.
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                                                                       2009           2008
SECURITIES PURCHASED IN THE FRAMEWORK OF OPEN
MARKET TRANSACTIONS                                                26 296 700      25 073 300

Bonds equivalent to Treasury bonds purchased firm                  26 296 700      25 073 300


NOTE 5 : ADVANCE TO THE STATE PERTAINING TO MONETARY FUNDS
SUBSCRIPTION
This heading enters as an advance to the Treasury the counter value in dinars of amounts
paid out for subscriptions corresponding to Tunisia’s shares in the capital of the International
Monetary Fund and the Arab Monetary Fund, in application of the terms of law n°77-71 of
7 December 1977 governing relations between the Central Bank of Tunisia and these two
financial institutions.
      - International Monetary Fund : The overall amount of Tunisia’s subscription in the
capital of this institution comes to 286.5 million SDRs, 266.3 million in dinars credited to
account n°1 in the name of the International Monetary Fund and 20.2 million in convertible
currency.
      - Arab Monetary Fund: Tunisia holds a 12.85 million Arab accounting dinar share in the
capital of this institution. This includes 7 million Arab accounting dinars as a cash
subscription (6.9 million in convertible currencies and 0.1 million in local currency, credited to
the AM