Tunisia Targets Narrowing Deficit Even as Virus, Politics, Weigh
Tunisia Targets Narrowing Deficit Even as Virus, Politics, Weigh
(Bloomberg) -- Tunisia expects its budget deficit to narrow next year, even as the North African nation struggles to revive an economy battered by the coronavirus pandemic and hobbled by a lingering political crisis.
The economy is projected to grow 2.6% compared with 2.8% this year, Finance Minister Siham Namsia said Tuesday. The budget deficit is expected to narrow to 6.7% from 8.3%.
The 2022 budget was long-awaited in a country where political stasis has prevailed since President Kais Saied in July fired his prime minister and suspended parliament -- moves his critics dubbed a coup. Saied said the steps were necessary to divert the country from the road to ruin charted by governments since the 2011 uprising that ousted President Zine El Abidine Ben Ali.
Since then, an economy already hard hit by the coronavirus pandemic has struggled further, with the need for an agreement with the International Monetary Fund building steadily amid concerns about the ability to meet creditor obligations. Officials have said they expect a deal with the Washington-based fund in the first quarter and have offered assurances that they’ll keep foreign reserves at levels sufficient to meet their obligations.
Namsia said the government will again raise fuel prices in 2022 -- a move likely to further anger the powerful labor unions who have already rejected tax hikes and price increases.
The overall budget is set at 57.2 billion dinars ($19.9 billion), up 3.2% from 2021, she said, and is based on crude oil at $75 a barrel. The nation’s financing needs are projected at 18.6 billion dinars, with 12.6 billion dinars needed from abroad.
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