EconSource: Tunisia, EU Launch Talks on Free Trade Agreement

Tunisia and the European Union (EU) launched negotiations Tuesday for a comprehensive free trade agreement, a deal some Tunisian experts fear could undermine their economy. The European Commission (EC) says the Deep and Comprehensive Free Trade Agreement (DCFTA) would help support economic reforms in Tunisia. “The aim of the agreement is to improve market access opportunities and the investment climate and support ongoing economic reforms in Tunisia,” the EC said. EU Trade Commissioner Cecilia Malmstrom announced the launch of the negotiations during a visit to Tunis and talks with Tunisian Trade Minister Ridha Lahouel and Prime Minister Habib Essid. “We are conscious that there are some concerns [about the agreement] and that is why we must work with the government and have a constant dialogue with businesses and civil society,” Malmstrom said. Lahouel said discussions could last years before a deal is clinched, adding that Tunis will reject anything that undermines its interests. Tunisian economists fear it could force an opening of Tunisian markets and risk unfair European competition. The EC said the first round of talks will begin in Tunis on Monday and last for a week. Meanwhile, Tunisia agreed on Monday to join the EU’s research and innovation program, “Horizon 2020.” [AFP, TAP, 10/13/2015]

Egypt to receive $3 billion loan from World Bank
Egypt will receive a $3 billion loan from the World Bank in installments over the next three years to support the state’s budget, Finance Minister Hany Dimian said on the sidelines of an economic conference on Wednesday. “The advantage of this loan is that it comes with very soft terms with regards to financing and tenor, and has a grace period,” Dimian said. He did not provide details on the sectors in which the loan will be used or the time frame of the disbursements. “The government is aware of the economic conditions which we’re passing through, and there is a deficit in the budget and we have to handle it gradually,” Prime Minister Sherif Ismail said in separate remarks at the conference. Egypt’s fiscal year 2015/2016 budget projects a deficit of 8.9 percent a 5 percent growth rate. Ismail said the government is looking to decrease the budget deficit by 1.5 percent annually. On Tuesday, Investment Minister Ashraf Salman said Egypt’s economy grew by 4.1 percent in the fiscal year that ended in June. He projected a growth rate of about 5 percent in the current fiscal year. [Reuters, Bloomberg, Aswat Masriya, 10/14/2015]

Saudi brings forward state spending deadline in budget clampdown
Saudi Arabia’s Finance Ministry is closing its national accounts one month earlier than usual this year, suggesting it is tightening control over spending as low oil prices create a record state budget deficit. Economists estimate Saudi Arabia’s budget deficit could total $120 billion or more this year. A document sent by the ministry to government bodies this week instructs them to “bring forward the final date to make payments from budget allocations and other accounts for the current fiscal year.” According to the document, the new deadline to make payments is November 15. In past years, the deadline fell in mid-December. Earlier this month, the ministry told government bodies that if budget allocations were not fully spent on the projects for which they were originally earmarked, the remaining money must return to the Treasury. [Reuters, 10/13/2015]

Libyan oil production over 500,000 bpd, says Tripoli Oil Minister
Libya’s national oil production is currently at 504,000 barrels per day (bpd), according to Tripoli Oil Minister Mashallah al-Zwai. Last week, National Oil Corporation Spokesman Mohammed al-Harari said oil output was over 400,000 bpd. Zwai did not elaborate on the increase in output, but the Arabian Gulf Oil Company (AGOCO) recently resumed production at several fields. Current production remains far below Libya’s overall output capacity of around 1.6 million bpd. Al-Zwai has also met with local groups that have blocked a key pipeline to the Sharara oil field. Reports suggest that an agreement may have been reached. The oil field in southwest Libya has a nominal capacity of 340,000 bpd and has been closed since the beginning of the year. [Reuters, Libya Monitor (subscription), 10/13/2015]

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