عربي English Türkçe اردو فارسى
Logo
Latest News
Business

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
TT
TT

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.

Most Viewed

 
 
Business

IMF: Middle East Conflict Escalation Could Have Significant Economic Consequences

Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
TT
TT

IMF: Middle East Conflict Escalation Could Have Significant Economic Consequences

Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki

The International Monetary Fund said on Thursday that an escalation of the conflict in the Middle East could have significant economic ramifications for the region and the global economy, but commodity prices remain below the highs of the past year.

IMF spokesperson Julie Kozack told a regular news briefing that the Fund is closely monitoring the situation in southern Lebanon with "grave concern" and offered condolences for the loss of life.

"The potential for further escalation of the conflict heightens risks and uncertainty and could have significant economic ramifications for the region and beyond," Kozack said.

According to Reuters, she said it was too early to predict specific impacts on the global economy, but noted that economies in the region have already suffered greatly, especially in Gaza, where the civilian population "faces dire socioeconomic conditions, a humanitarian crisis and insufficient aid deliveries.

The IMF estimates that Gaza's GDP declined 86% in the first half of 2024, Kozack said, while the West Bank's first-half GDP likely declined 25%, with prospects of a further deterioration.

Israel's GDP contracted by about 20% in the fourth quarter of 2023 after the conflict began, and the country has seen only a partial recovery in the first half of 2024, she added.
The IMF will update its economic projections for all countries and the global economy later in October when the global lender and World Bank hold their fall meetings in Washington.
"In Lebanon, the recent intensification of the conflict is exacerbating the country's already fragile macroeconomic and social situation," Kozack said, referring to Israel's airstrikes on Hezbollah in Lebanon.
"The conflict has inflicted a heavy human toll on the country, and it has damaged physical infrastructure."
The main channels for the conflict to impact the global economy have been through higher commodity prices, including oil and grains, as well as increased shipping costs, as vessels avoid potential missile attacks by Yemen's Houthis on vessels in the Red Sea, Kozack said. But commodity prices are currently lower than their peaks in the past year.
"I just emphasize once again that we're closely monitoring the situation, and this is a situation of great concern and very high uncertainty," she added.
Lebanon in 2022 reached a staff-level agreement with the IMF on a potential loan program, but there has been insufficient progress on required reforms, Kozack said.
"We are prepared to engage with Lebanon on a possible financing program when the situation is appropriate to do so, but it would necessitate that the actions can be taken and decisive policy measures can be taken," Kozack added. "We are currently supporting Lebanon through capacity development assistance and other areas where possible."