The Tunisian government has issued a decree permitting to demand a loan to meet part of the state budget's needs for 2020. The issuance of this loan can take place through opening accounts for this purpose at licensed mediators.
This year's budget requires around TND11 billion (USD4 billion) distributed over foreign and domestic loans, while the overall 2020 budget stands at no less than TND47 billion.
Prime Minister Elyes Fakhfakh had stated that Tunisia has covered the needs of the 2020 budget, but the general fiscal status necessitates expediting urgent solutions in consultation with all partners, and social organizations, starting with the by the Tunisian General Labor Union.
Since its independence in 1956, Tunisia has issued four debenture and domestic loans. The first was in 1964 with the establishment of the state, the second in 1986 when the country underwent a severe economic crisis, the third in 2014 to provide financial resources for the state’s budget and the fourth in 2020 to contribute to reducing the impact of COVID-19.
The latest data provided by the government showed a drop in the activity of the majority of economic sectors by more than 50 percent. The Ministry of Finance decided against the use of more external debt and that all new expenses that arise in the country would be funded only through internal loans
“External debt reached dangerous levels and now reached 60 percent of GDP, compared to 30 percent in 2013 and I decided not to continue along this path,” Fakhfakh said.
The World Bank expected Tunisia’s economy to shrink by 4 percent by the end of the year, and grow by 4.2 percent in 2021. However, the PM said it would shrink by about 7 percent.
