The Washington-based IMF has released a $302m tranche of Tunisia’s standby agreement, bring total lending to $1.4bn.

The two-year standby agreement, approved in June 2013, is worth $1.6bn.

“Tunisia’s economy has been resilient in a context marked by a prolonged political transition and a difficult international economic environment,” Mitsuhiro Furusawa, deputy managing director and acting chair of the IMF executive board, said in a press release. “However, progress on structural reforms, including in the banking and fiscal areas, has been challenging.”

The standby agreement was extended until the end of 2015 to give Tunisia more time to carry out banking and investment reforms.

The recapitalisation of state-owned banks began in July.

The IMF has praised the 2015 budget in the context of terrorist attacks on tourism targets and recession. Several hotels and resorts have closed and tourist numbers have fallen by 25 per cent in 2015, according to the Tourism Ministry.

The fund advised further budget cuts in 2016 as well as reforms to state-owned companies, banking regulations, taxation, investment and labour regulations.

“Boosting growth and creating jobs requires an improved business environment,” said Furusawa. “Faster implementation of the structural reform agenda, particularly to strengthen the investment climate and labor markets, is encouraged.”

Foreign investment recovered in 2015, reaching TD1.6bn ($814m) in the first eight months, compared with TD1.2bn in the same period in 2013 and 2014, according to Tunisia’s Foreign Investment Promotion Agency.