WASHINGTON—Tunisia sealed a $2.8 billion bailout from the International Monetary Fund, the emergency financing institution said Friday, contingent on the North African nation speeding up promised economic overhauls.

The bailout, which still needs an official green light from the IMF executive board next month, will help the country fill a yawning budget gap and help reassure investors waiting for more economic stability and policy certainty from the Tunisian government.

A series of terror attacks and continuing political conflict has exacerbated economic struggles in Tunisia as it labors to be the new model of Arab democracy.

“We will stand with Tunisia to help Tunisia deal with its difficulties, difficulties related to its security, the development of growth and the increased unemployment,” IMF Managing Director Christine Lagarde said Thursday ahead of the deal.

Although the economy is expected to rebound from a 0.8% expansion last year, the IMF downgraded the outlook for 2016 and expects tat least a 4% budget deficit.