Tunisian Parliament Approves 2021 Budget With Deficit Forecast at 7% GDP

The central bank in Tunis | REUTERS/Zoubeir Souissi/File Photo
The central bank in Tunis | REUTERS/Zoubeir Souissi/File Photo
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Tunisian Parliament Approves 2021 Budget With Deficit Forecast at 7% GDP

The central bank in Tunis | REUTERS/Zoubeir Souissi/File Photo
The central bank in Tunis | REUTERS/Zoubeir Souissi/File Photo

Tunisia's Parliament has approved with 110 votes in favor, 21 against, and two abstentions, the 2021 budget law with a deficit forecast at 8 billion dinars, or 2.5 billion euros, over 7% of GDP. State expenditure, according to the official page of Parliament, will total 41 billion dinars while revenues should reach 33 billion dinars.

Calculated on a price of oil at 45 dollars per barrel, the budget law sets a growth target of 4% in 2021, after a historic drop of GDP of 7% forecast in 2020 due to the crisis sparked by the COVID-19 pandemic.

Debate on the draft legislation began at the end of November and was marked by strong political tension with at times clashes recorded between bickering parties. According to the new measures, corporate taxes will go from 15% for those who had to pay 25%. Moreover, deductions on capital gains on the sale of stocks and bonds were cut from 25% to 15%.

Deductions on payments, commissions, intermediation, rentals, and revenues from noncommercial activities as well as payments in exchange for services dropped from 15% to 10%.

These dispositions will concern revenues made from January 1, 2021, and declared in 2022 and over the subsequent years.

Withholding taxes will occur as of January 1, 2021. The State budget for 2021 does not provide for hires in the public sector with the exception of healthcare and the security sector.

The Tunisian Central Bank (BCT) has criticized a deficit that was deemed excessive in 2020 (14% of GDP) and excessive internal financing in the supplementary budget. The four-year financing plan of the International Monetary Fund (IMF) ended in the spring without defining a certain strategy of collaboration for the future and an IMF delegation is about to arrive in Tunis, the Tunisian economy minister said recently.

Tunisia over the past few years has relied heavily on international donors. During the presentation of the draft budget in Parliament on November 28, the head of government Hichem Mechichi said the text presents ''a quantified framework'' of the ''infructuous'' political consequences stemming from several years of economic, social, and political instability. From the revolution in 2011, nine governments have taken office, preventing the adoption of fundamental reforms to relaunch an economy in difficulty.



Egypt's Non-oil private Sector Contracts Further in April

FILE PHOTO: Egyptians and tourists visit the Great Pyramids in Giza, on the outskirts of Cairo, Egypt, November 4, 2024. REUTERS/Amr Abdallah Dalsh/File Photo
FILE PHOTO: Egyptians and tourists visit the Great Pyramids in Giza, on the outskirts of Cairo, Egypt, November 4, 2024. REUTERS/Amr Abdallah Dalsh/File Photo
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Egypt's Non-oil private Sector Contracts Further in April

FILE PHOTO: Egyptians and tourists visit the Great Pyramids in Giza, on the outskirts of Cairo, Egypt, November 4, 2024. REUTERS/Amr Abdallah Dalsh/File Photo
FILE PHOTO: Egyptians and tourists visit the Great Pyramids in Giza, on the outskirts of Cairo, Egypt, November 4, 2024. REUTERS/Amr Abdallah Dalsh/File Photo

Egypt's non-oil private sector economy contracted further in April after a decline in domestic and foreign demand caused new orders and output to fall for a second month, according to a survey released on Tuesday.

The S&P Global Egypt PMI headline index dropped to 48.5 in April from 49.2 in March, marking the lowest reading so far in 2025. A figure below 50 indicates contraction and one above 50 indicates growth, reported Reuters.

"Business activity weakened for the second month running in April as firms highlighted an additional drag from falling sales," said David Owen, Senior Economist at S&P Global Market Intelligence. International market weakness impacted business confidence and spending, he said.

Despite rising input costs, driven largely by a 15% increase in fuel prices, firms kept sale prices stable, ending 56 months of inflation. Employment and purchasing activity also decreased, with companies reducing staff for a third consecutive month.

While input prices rose at their fastest pace in four months, output prices remained unchanged, reflecting subdued pressure on costs, the survey indicated. Firms expressed cautious optimism about future activity, with confidence ticking up to a three-month high, although still below long-term trends.

Supply chains remained stable, with delivery times unchanged and inventories slightly increasing. The sub-index for output dipped to 47.4 from 48.6, while that for new orders fell to 47.24 from 49.0.