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.



Oil Prices Climb on Short-covering, but Tariff Concerns Linger

The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, US, November 22, 2019. REUTERS/Angus Mordant/File Photo
The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, US, November 22, 2019. REUTERS/Angus Mordant/File Photo
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Oil Prices Climb on Short-covering, but Tariff Concerns Linger

The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, US, November 22, 2019. REUTERS/Angus Mordant/File Photo
The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, US, November 22, 2019. REUTERS/Angus Mordant/File Photo

Oil prices climbed on Tuesday as investors took advantage of the previous day's losses to cover short positions, although concerns persisted over economic headwinds from tariffs and US monetary policy that could dampen fuel demand.

Brent crude futures rose 36 cents, or 0.5%, to $66.62 a barrel at 0421 GMT. The US West Texas Intermediate crude contract for May, which expires on Tuesday, was at $63.73 a barrel, up 65 cents, or 1%.

The more actively traded WTI June contract was up 0.7%, or 43 cents, at $62.84 a barrel, Reuters said.

Both benchmarks dropped more than 2% on Monday, as signs of progress in nuclear deal talks between the US and Iran helped ease supply concerns.

"Some short-covering emerged after Monday's sharp sell-off," said Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment, a unit of Nissan Securities.

"However, concerns about a potential recession driven by the tariff war persist," he said, predicting that WTI will likely trade in the $55–$65 range for the time being given ongoing uncertainty related to tariffs.

On Monday, US President Donald Trump repeated his criticism of Federal Reserve Chair Jerome Powell and said the US economy could slow unless interest rates were lowered immediately.

His comments about Powell fueled worries about the Fed's independence in setting monetary policy and the outlook for US assets. Major US stock indexes dropped and the dollar index slid to a three-year low on Monday.

"The growing uncertainty surrounding US monetary policy is expected to negatively impact financial markets and the broader economy, raising fears that it could lead to a decline in crude oil demand," Kikukawa said.

A Reuters poll on April 17 showed investors believe the tariff policy will trigger a significant slowdown in the US economy this year and next, with the median probability of recession in the next 12 months approaching 50%.

The US is the world's biggest oil consumer.

Progress in talks between the US and Iran, which on Saturday agreed to begin drawing up a framework for a potential nuclear deal, could also weigh on oil prices and reduce supply concerns as the Middle Eastern country is a major producer.

"Our view that Iran's oil exports face imminent downside risks due to the enforcement of US sanctions has eased given ongoing talks between US and Iran," Vivek Dhar, an analyst at Commonwealth Bank of Australia, said in a note, adding that US sanctions relief was potentially on the table.

Meanwhile, Russia's economy ministry has cut its forecast for the average price of Brent crude in 2025 by nearly 17% from what it saw in its September calculations, according to documents obtained by Reuters.

US crude oil and gasoline stockpiles were expected to have fallen last week, while distillate inventories likely rose, a preliminary Reuters poll showed on Monday, ahead of weekly reports from the American Petroleum Institute and the Energy Information Administration.