Tunisia Is Having a ‘Severe Crisis,' President Says

(Bloomberg) -- Tunisia’s prime minister should either urgently address the country’s political and economic crisis or step aside, the president said.

The intervention by Beji Caid Essebsi during a television interview comes as international investors signal deepening concerns about the economy, and ordinary Tunisians turn on politicians they see as more interested in jockeying ahead of presidential elections next year.

Prime Minister Youssef Chahed must “move to change the situation and improve it,” Essebsi said on Nessma TV. “If that is not possible, then he must resign or to go to the parliament” for a vote of confidence, he said.

“The disagreement between the political forces cannot continue,” the president said in a reference to the dispute between a faction of the Nidaa Tounes party that wants Chahed to step down, and the moderate Islamist Ennahda party, which opposes the move as destabilizing.

The political and economic situation in Tunisia is “bad and has reached a severe crisis that cannot be continued,” Essebsi said. Chahed was appointed in 2016.

Tunisia has avoided the worst of the violence and political upheaval that gripped the region since the 2011 Arab Spring uprisings. Yet nine governing cabinets have failed to revive the economy, a situation which World Bank’s Middle East and North Africa Vice President Ferid Belhaj on July 11 described as “acute.”

The key tourism sector is showing signs of recovering from terrorist attacks in 2015, but the scale of the challenge is daunting for the nation’s bickering leaders.

Tunisia Is Having a ‘Severe Crisis,' President Says

Youth unemployment stands at about 30 percent -- double the overall national level. Foreign investments have yet to materialize, and foreign reserves cover only around 75 days of imports, according to the latest central bank figures. That’s about 4 days more than the previous figure, and could reflect the arrival of the latest installment of the International Monetary Fund’s $2.9 billion loan that the country secured in 2016.

Inflation in May climbed to 7.8 percent, exceeding the 7.7 percent a month earlier that had been a 25-year high.

The IMF has said the government, while clearly committed to reforms, must be ready for further increases in the benchmark interest rate to counter inflation. In addition, it urged greater efforts on cost-cutting measures -- steps that could be a source of friction as prices rise.

©2018 Bloomberg L.P.