Asharq Al-awsat English Middle-east and International News and Opinion from Asharq Al-awsat Newspaper

Tunisia Announces Economic Roadmap

Tunisia Announces Economic Roadmap

Monday, 26 March, 2018 - 11:15
A man walks towards the Central Bank in Tunis. Reuters

The Tunisian government has unveiled a new economic and social program, identifying a set of measures and mechanisms seen as a "roadmap" for the economy’s revival until 2020.

The program aims at maintaining a sustainable level of budget deficit and external debt and controlling inflation rates, structural reform of public finances and stability of public debt.

The government is looking forward to reducing the budget deficit this year to 4.9 percent of the GDP, down from six percent last year.

The country has been suffering from rising inflation as the Tunisian National Institute of Statistics has recently announced that annual inflation rose to 7.1 percent in February for the first time from two decades.

Tunisia’s central bank expected inflation to amount to 7.2 percent this year, with the rate falling to between five and six percent in 2019.

The government’s plan aims to reduce the growth of the wage budget to 12 percent of the GDP, review the collection system to establish a fair tax system, push for domestic and foreign investment, combat smuggling and parallel trade, establish a basis for social protection, support employment and create new jobs.

The government will rely on a strategy to reform the public employment sector in order to improve the services of public utility and reduce the government wage budget from its levels in 2017, which amounted to 14.1 percent of the GDP.

Among the reforms proposed by the government are reviewing the retirement age and raising them from 60 to 65 years.

Notably, the public sector in Tunisia suffers from a large surplus in labor. The IMF has recommended a reduction in the number of public sector employees from about 650,000 to only 500,000.

In this context, the government had approved a plan to dismiss thousands of employees gradually until 2020, and it urged thousands, particularly those over the age of 55, to leave voluntarily, providing them with financial incentives.

Editor Picks