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Tunisia Discusses Reform Program With IMF

Tunisia Discusses Reform Program With IMF

Tuesday, 12 January, 2021 - 11:15
The International Monetary Fund (IMF) (Reuters)

The Tunisian government asserted its commitment to the International Monetary Fund (IMF) to develop a program of economic reforms.

The program comes in line with the government's vision of cooperating with the international financial structure, and financial capacity.

During his first virtual meeting with the IMF experts, Prime Minister Hichem Mechichi said that Tunisia is ready to implement a number of structural reforms.

“Tunisia is preparing to launch structural economic and social reforms, after having put in place the institutions and bodies that strengthen the democratic process.”

The Tunisian government is looking for a feasible way to finance the current year’s budget after its agreement with the IMF ended in 2020.

The agreement enabled Tunisia to obtain $2.9 billion used to finance the budget and run state affairs.

A number of Tunisian economic and financial experts expect it will be difficult for the government to fulfill its financial pledges and establish economic, social, and structural reforms.

Former Trade Minister Mohsen Hassan and economist Ezzeddine Saidane indicated that reforms implemented by the current and former government had negative impacts at the local level.

Prices of various commodities continued to increase, including fuel and medicine, as the Tunisian dinar devalued against foreign currencies, especially the euro and the dollar.

Meanwhile, the Tunisian parliament approved a $19.2 billion budget for 2021, a 1.8 percent increase compared to last year's budget.

The budget deficit was estimated at $2.9 billion, over seven percent of the GDP.

The record budget deficit questions the current government capabilities to overcome the deep financial gap, in light of a continuous economic recession and an increase in government expenditures, despite repeated warnings from the IMF.

The budget calculated the price of oil at $45 per barrel, as the Finance Ministry set a growth target of four percent by the end of 2021.

However, economists and financial experts believe the government will not be able to improve the growth index during the current year due to the lack of local resources and the negative indicators affecting the restructuring of the Tunisian economy.

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