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· The Tunisian government will be borrowing US $7 billion more from foreign lenders and domestic sources to stimulate the country’s economy next year
· The plan to borrow has been revealed by Tunisian finance minister Sihem Boughdiri
· In 2022, the North African country will be spending over three percent, year on year, to push the spending level to US $19.8 billion
· According to the finance minister, the budget deficit, excluding donations, will be within 9.3 billion dinars. In percentage terms, the deficit is expected to be 6.7 percent of the gross domestic product
The Tunisian government will be borrowing US $7 billion more from foreign lenders and domestic sources to stimulate the country’s economy next year. The plan to borrow has been revealed by Tunisian finance minister Sihem Boughdiri. In 2022, the North African country will be spending over three percent, year on year, to push the spending level to US $19.8 billion.
According to the finance minister, the budget deficit, excluding donations, will be within 9.3 billion dinars. In percentage terms, the deficit is expected to be 6.7 percent of the gross domestic product.
The government’s debt will zoom to 82.6 percent of GDP. Tunisia has hard hit by the pandemic and is struggling to come out of it. High inflation and unemployment at around 18 percent are pulling down the fragile economy. Foreign debt in 2021 hit 100 percent of GDP, giving a warning signal to the north African country.
The finance minister confirmed that the government was hoping to reach a bailout deal with the International Monetary Fund (IMF) and the negotiations will start in the early 2022. Importantly, the earlier dispensation of Tunisia also had been in talks with the IMF over a new bailout package. However, the country will have to bear with the forced reforms that will come as a precondition for availing the bailout package. The subsides that are being doled out on basic goods or tackling the wage bill of a public sector that employs some 680,000 of the country’s 12 million inhabitants may have to be relooked if the country avail the credit from the IMF, which are always a politically sensitive issue.
