Tunisia needs at least $1 bln more funding-cbank head

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June 9, 2011 3:55 AM EST

Tunisia will need at least $1 billion in additional funding from lenders this year, the head of the central bank said on Wednesday, adding weak tourism activity and private investments were choking the growth.

"We have a package, which is being prepared, of $1.4 billion, which is ongoing, but there is still need for more this year," Mustapha Kamel Nabli told reporters on the sidelines of the World Economic Forum in Vienna.

"Our hope is to get at least another billion for this year."

External funding was needed to bridge the short-term gap, as private capital was not rushing into the country heading towards its first ballot since the overthrow of President Zine al-Abidine Ben Ali in a "Jasmine Revolution" on January 14.

Investors will stay out in the near future and seek for more clarity on future business environment, Nabli said.

The country, which served as springboard for a wave of Arab citizen revolts, agreed earlier on Wednesday to delay the election by a further week to October 23 a postponement to ensure it will be "free and transparent".

"Paradox during this transition period now is this gap (discontent) is increasing, instead of getting smaller it is getting bigger, because the expectations go up," Nabli said earlier when addressing the panel at the World Economic Forum.

"But the economy is going down. The fact is that this period is a period of increasing gap and therefore of increasing tensions," he added.

Nabli said the country's economic growth this year will also be much weaker than normal, with tourism and private investments hurting, adding the bank will publish its new forecasts soon.

Tunisia has been struggling to restore stability and rebuild its economy since Ben Ali's ouster, with tourist numbers sharply down and the World Bank forecasting just 1.5 percent economic growth this year.

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