Tunisian Confederation of Industry: Authorities Should Announce Economic State of Emergency

An elderly man wearing a face mask due to the COVID-19 pandemic at the central market in Tunis. AFP file photo
An elderly man wearing a face mask due to the COVID-19 pandemic at the central market in Tunis. AFP file photo
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Tunisian Confederation of Industry: Authorities Should Announce Economic State of Emergency

An elderly man wearing a face mask due to the COVID-19 pandemic at the central market in Tunis. AFP file photo
An elderly man wearing a face mask due to the COVID-19 pandemic at the central market in Tunis. AFP file photo

The President of the Tunisian Confederation of Industry, Trade and Handicrafts, Samir Majoul, called on the government to activate the state of emergency to salvage the economy.

Earlier, the Central Bank of Tunisia (BCT) predicted a sharp economic contraction during Q2 of 2020, ranging between 10 and 12 percent, with the unemployment rate predicted to increase to 21.6 percent, a rise of no less than 274,500 unemployed citizens.

Majoul called for creating the necessary conditions to revive the economy by expediting major reforms, boost development and support all sectors.

This year, the Tunisian economy recorded its worst result since 1997, and the head of National Institute of Statistics, Adnen Lassoued, revealed that the economy fell over 21 percent.

The contraction hit major sectors, affecting mainly the service industry.

Hotels, restaurants, and cafes contracted 77.5 percent and the transport sector 51.4 percent, in addition to the 15.8 percent contraction of the non-marketed service sector, mainly paid by the administration.

Meanwhile, the added value of industries dropped 27 percent due to the noticeable decline in the production of exported industries, similar to the textile and clothing sector, which suffered the largest loss of 42 percent.

The exports of the mechanical and electrical industries decreased 35.9 percent, and the added value of the building materials saw a significant decline of 38.4 percent, following the sharp drop in construction.

Economic and financial experts believe an economic recovery depends on the ability to control the coronavirus pandemic in Tunisia and its partner European countries.

Tunisian economist Ezzeddine Saidane stressed that overcoming the economic downturn requires large financial resources that the country does not possess over the authorities’ failure to resort to the international financial market as a result of the continuous reduction of the credit rating since 2011.

Saidane noted that relying on local resources requires exceptional solutions, such as adopting a different monetary policy.

The International Monetary Fund (IMF) was not satisfied with this financial policy that directed development and investment funds to bridge the budget deficit over the past years.

He said that this policy puts the Tunisian economy in a vicious circle.



Gold Slips as US Bond Yields Rise, Investors Assess New Tariffs

Gold rings are displayed in a gold shop in Chinatown in Bangkok, Thailand August 21, 2018. REUTERS/Soe Zeya Tun/File Photo
Gold rings are displayed in a gold shop in Chinatown in Bangkok, Thailand August 21, 2018. REUTERS/Soe Zeya Tun/File Photo
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20

Gold Slips as US Bond Yields Rise, Investors Assess New Tariffs

Gold rings are displayed in a gold shop in Chinatown in Bangkok, Thailand August 21, 2018. REUTERS/Soe Zeya Tun/File Photo
Gold rings are displayed in a gold shop in Chinatown in Bangkok, Thailand August 21, 2018. REUTERS/Soe Zeya Tun/File Photo

Gold prices eased on Tuesday, weighed by higher US Treasury yields as US President Donald Trump announced new tariff proposals on trading partners, including Japan and South Korea.

Spot gold was down 0.2% at $3,328.67 per ounce, as of 1207 GMT. US gold futures fell 0.1% to $3,338.20.

The yield on benchmark US 10-year notes rose to a two-week peak, making the non-yielding bullion less attractive.

"Gold is stuck between a rock and a hard place," said UBS commodity analyst Giovanni Staunovo, Reuters reported.

"Negative for the gold price is the US decision to extend the deadline for a trade deal for many trade partners, positive for the gold price is the fact that key US trading partners in Asia might have to deal with higher tariffs in the near future, weighing on economic growth prospects."

On Monday, Trump told 14 countries that sharply higher tariffs would start on August 1, marking a new phase in the trade war he launched in April, with levies between 25% and 40%.

The new deadline was firm, Trump said, adding that he would consider extensions if countries made proposals for a trade deal.

"Reciprocal tariffs" were to be capped at 10% until July 9 to allow for negotiations, but so far, agreements have been reached only with Britain and Vietnam. In June, Washington and Beijing agreed on a framework covering tariff rates.

Meanwhile, China has warned the Trump administration against reigniting trade tensions and threatened to retaliate against nations that strike deals with the US to exclude it from their supply chains.

Trump's tariffs have stoked inflation fears, further complicating the US Federal Reserve's path to lower interest rates.

Investors await minutes of the Fed's June meeting, due on Wednesday, for more clues into the bank's policy outlook.

Spot silver fell 0.1% to $36.71 per ounce, platinum rose 0.2% to $1,372.51, and palladium rose 0.6% to $1,117.33.