Tunisia inflation hits 57-month high

Tunis, February 9, 2013

Tunisia's consumer price inflation rose to 6 per cent in January, the highest since April 2008, from 5.9 per cent in December, boosted by rapidly rising prices of food and clothing, official data showed on Saturday.

Food and drink prices climbed 8.7 per cent year-on-year while clothing and footwear gained 7.7 per cent.

Rising inflation may add to pressure on the government of Prime Minister Hamadi Jabali as it struggles to restore stability after this week's assassination of an opposition politician. Poor economic conditions sparked protests that led to the ouster of veteran ruler Zine al-Abidine Ben Ali in 2011.

The central bank is not aiming for a particular inflation rate but the most that should be tolerated is 5 per cent, central bank governor Chadli Ayari told Reuters last October.

Inflation rose last year partly because of depreciation of the Tunisian dinar against the dollar between mid-2011 and mid-2012. The currency has now stabilised, but Tunisia is running a trade deficit, which grew to 11.64 billion dinars ($7.48 billion) in 2012 from 8.61 billion dinars in 2011.

To help stabilise its external position, Tunisia said late last month that it was in talks with the International Monetary Fund on a 2.73 billion dinar loan.-Reuters
 

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