Tunisia is negotiating a number of countries, including Saudi Arabia, France and Italy to defer this year’s loan payments, as it expects its economy to shrink 6.5 percent because of the effects of COVID-19 pandemic, announced Investment Minister Slim Azzabi.
Finance Minister Nizar Yaich announced Monday that Tunisia's budget deficit in 2020 will be about 7 percent of gross domestic product (gdp) compared with 3 percent announced in previous estimates.
The Finance Minister indicated that debt is exceeding 85 percent and the country will need an additional financing of 5.4 billion dinars.
Speaking at a press conference where ministers presented a plan to revive the economy to recover from the effects of the new coronavirus, Yaich announced that the finance law adopted early in 2020 expected growth rate of 2.7 percent, while the rate is currently estimated to shrink to 6.5 percent.
The government plans to offer a nine-month bailout until March 2021, which includes increasing cash flow to help institutions that suffered during the pandemic, and improve the investment and business climate.
Tunisia’s tourism sector, which contributes nearly 10 percent of the gdp and a key source of foreign currency, was hit hard by the pandemic.
Tourism revenue in the first six months of this year fell by 50 percent from the same period of 2019.
The future of the current government, led by Elyes Fakhakh, is unclear especially after Ennahda party, the largest party in the government coalition, announced its intention to launch new political consultations to form an alternative government.
On June 27, Tunisia reopened its border and scheduled the full return of the tourism activity starting July. It hopes tourism will help the economy especially after it succeeded in containing the pandemic, with a total number of confirmed cases reaching 1,175.
