Central Bank of Tunisia THE ECONOMIC SITUATION PERIODICAL

INTERNATIONAL ENVIRONMENT

The international environment continued to be marked, over the first nine months of 2010, by pursuit of recovery measures by certain industrialised countries to further support economic recovery in a time the problem of public debt led a number of countries, mainly, in the European Union, to take budgetary austerity measures. On the other hand, commodities' price rise on the world market went on and foreign exchange markets posted a drop for the US dollar, notably, against the euro and the Japanese yen ; while international stock indexes posted an upward trend in most of the periods. Despite rising doubts with respect to soundness of economic growth in certain industrialised countries, the International Monetary Fund (IMF) reviewed upward its world economic growth forecasts for 2010 : 4.8% vs. previous forecasts of 4.6% in July and 4.2% last April. This improvement concerned the developed countries (2.7% vs. 2.6% in forecasts over July), excluding the United States (2.6% vs. 3.3%) in particular the Euro Zone (1.7% vs. 1%) and Japan (2.8% vs. 2.4%). As for Emerging and developing countries , growth rate for 2010 is projected at 7.1% compared to previous forecasts of 6.8% in the wake of an expected improvement in Central and eastern Europe (3.7% vs. 3.2% as per previous estimates) and in the region of Latin American and the Caribbean islands (5.7% vs. 4.8%). For the year 2011 , the IMF reviewed slightly downward its growth forecasts : 4.2% compared to 4.3% in estimates last July and this, notably, in line with the effects of budgetary austerity programmes set by certain countries, in particular in the European Union, to face up to the public indebtedness crisis. The American economy posted, over the current year, a slower pace of economic recovery, a reduced level of inflation and a drop in the dollar exchange rate against the other main currencies, mainly the yen and the euro ; further to persisting high level of unemployment. To further support the economic recovery, boost domestic demand and hold down unemployment, the US federal Reserve is expected to take up more flexible decisions in the monetary policy. Worth of note that available economic indicators in this country confirm slower economic activity with 1.9 point drop in the advanced index of industrial sector in September 2010, while consumer confidence index diminished by some 5 points over the same month. In the Euro Zone , the advance index of industrial sector and services dropped by 1.4 point and 2.3 points respectively in September 2010. Besides, retail sales dropped by 0.4% in August compared to 1% progress in industrial production over the same month and 0.9 point increase in the economic confidence index in September. As for employment, the situation stabilised in the main industrialised countries with an unemployment rate of 9.6% in the United States in September 2010 and this for the second month in a row ; and 10.1% in the Euro Zone in August for the fourth straight month. This rate varied between 4.3% in Austria and 20.5% in Spain. In Japan, the unemployed rate came to 5.1% of the labour force in August 2010 compared to 5.2% in the previous month download