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UPDATE 1-Tunisia expects budget deficit to fall below 6 pct/GDP in 2013

(Adds details, background) By Tarek Amara

TUNIS, Oct 8 (Reuters) - Tunisia, which is seeing a pick-upin tourism and other economic sectors as it gradually recoversfrom last year's political turmoil, expects to cut its budgetdeficit to below 6 percent of GDP next year as economic growthaccelerates.

"Tunisia is looking to limit the budget deficit of the stateover the next year to 5.9 percent (of gross domestic product)compared with an expected 6.6 percent this year," FinanceMinister Salim Besbes told the state news agency.

"The government plans to achieve a growth rate of��������������4.5 percent in 2013," he added, reaffirming thegovernment's previously stated growth forecast for next year.

The Tunisian government led by the Islamic Ennahda Party,expects the economy to grow 3.5 percent this year.

Besbes said the budget for 2013 will increase by 3.1���������� percent from this year.

"According to the draft budget, Tunisia budget will reach26.342 billion dinars ($ 16.778 billion) in 2013, compared with25.401 billion dinars in 2012."

Last month the central bank governor said Tunisia's budgetdeficit should narrow to 6 percent next year.

Tourism has helped to spur Tunisia's economic recovery afterthe political upheaval last year that marked the start of the'Arab Spring', but tourism and other industries that earnforeign currency have been held back by the crisis in the eurozone, the country's major export market.

The North African country has held a steady course oninflation, interest rates and exchange rates even in the turmoilthat followed President Zine al-Abidine Ben Ali's ousting inJanuary last year.

Central bank Governor Chadli Ayari told Reuters last weekthat the bank could raise interest rates by 25-50 basis pointsas early as this month and launch new caps on bank lending inthe coming days to rein in inflation, now at 5.6 percent,fuelled by rampant consumption.

(Editing by Susan Fenton)

((tarek.amara@thomsonreuters.com))

Keywords: TUNISIA GROWTH

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