Tunisia trims 2014 growth forecast to 3.8%

Tunisia's economy will expand less quickly than hoped this year, the central bank said on Thursday, cutting its growth forecast to 3.8 percent from 4 percent.

The economy grew by 3 percent last year. The bank did not say why it was trimming its forecast, which came against a background of turmoil in many emerging economies as the U.S. Federal Reserve scales back its monetary stimulus.

The bank said the budget deficit was 8.3 percent of gross domestic product in 2013, compared with 8.2 percent a year earlier. Under pressure from international lenders to cut subsidies, the government hopes to reduce it to 6.5 percent this year, according to the 2014 budget.

Three years after toppling their autocratic leader Zine El-Abidine Ben Ali in an uprising that inspired other 'Arab Spring' revolts, Tunisia is progressing toward full democracy after approving a new constitution this week.

A new caretaker government has taken over to run the country until new elections later this year. But despite political progress, high living costs and a lack of economic opportunities are still the main concerns for many Tunisians.

The International Monetary Fund on Wednesday approved a $507 million loan tranche for the North African country, the second part of a $1.5 billion credit agreed at the start of 2013.

The central bank said foreign currency reserves stood at11.230bn Tunisian dinars ($6.98bn) by Jan. 28, equal to 102 days of import cover, compared to 106 days a month earlier.