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Tunisian Inflation Drops to Below 6 Percent

Tunisian Inflation Drops to Below 6 Percent

Tuesday, 7 July, 2020 - 08:30
A general view of Habib Bourguiba Avenue in downtown Tunis, virtually deserted on the first day of a general lockdown to stop the spread of COVID-19, March 22, 2020. (Reuters)
Tunis - Mongi Saidani

Tunisia’s annual inflation rate in June slowed to less than 6 percent from 6.3 percent in May, official data showed on Monday.

The slowdown is due to a drop in prices of food (4.3 compared to 4.7 percent in May), transport products and services (1.6 compared to 3.3 percent), clothing and footwear prices (6.7 compared to 7.6 percent), said the National Statistics Institute (INS).

Several economists saw this as a circumstantial decline linked to the abundance of vegetables, crops and most food items during this period. They predicted that the situation will only be temporary.

Tunisian economists Jannat bin Abdullah and Ezzedine Saidane said that the slowdown of inflation is linked to the drop in local demand for various products because of the weakening of the Tunisians’ purchasing power.

Separately, the government launched an economic rescue plan for 2021. It includes a program to restructure and rescue five strategic public institutions including: Tunisian Chemical Group, Gafsa Phosphate Company, Tunisair, Tunisian Company of Electricity and Gas and National Company of Water Exploitation and Distribution.

The plan aims to boost the economy through public investment.

The government – which succeeded in containing the COVID-19 pandemic – announced that the program is committed to supporting major institutions through providing additional funding to combat unemployment (a total of TND100 million or USD34 million).

Tunisia will also continue to establish government funds aimed at restructuring institutions through allocating TND700 million to guarantee the continuity of their operations.

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