The International Monetary Fund (IMF) mission concluded virtual talks on Tunisia by calling on the authorities to implement structural economic reforms.
Tunisian sources reported that the Fund stressed the need to reduce subsidies on essential goods such as petrol and staple foods, adding that state resources should be invested in education, health, and infrastructure.
IMF representatives conducted virtual discussions between Feb. 14 and 22 with Finance Minister Sihem Boughdiri, Central Bank Governor Marouane Abbasi, and concerned officials to implement needed economic reforms.
The IMF mission held extensive meetings over a week with the officials and ministers to reach an agreement on the financial support program between the two parties.
However, evidence and the few statements issued after the sessions were discouraging, indicating difficulty reaching an agreement.
The Tunisian authorities did not adhere to the Fund's recommendations and conditions.
Meanwhile, the IMF will hold another meeting to determine its position on the Tunisian financial program.
It called on the Tunisian authorities to implement reforms on subsidiaries, urging for better control on wages of state employees. These demands could complicate negotiations between the two parties, given the possibly severe repercussions on the social and economic levels.
The sessions touched on the need to reduce the fiscal deficit at the state budget level, enhance tax fairness, encourage the participation of the private sector in investment, and implement wide-ranging reforms for public institutions, most of which suffer from severe financial difficulties.
Minister of Economy Samir Said denied reports claiming subsidies would be canceled in Tunisia, despite it being one of the IMF's primary conditions for financing the Tunisian economy and obtaining a financial loan of about $4 billion.
IMF envoy to Tunisia Jerome Vacher confirmed that Tunis sought international funding after the economic recession, which reached unprecedented levels.
Vacher described the situation as the "worst recession since independence" in 1956.
"The country had pre-existing problems, in particular budget deficits and public debt, which have worsened," he said.
Its GDP plunged by almost nine percent in 2020, the worst rate in North Africa, only modestly offset by a three percent bounce back last year.
That is "quite weak and far from enough" to create jobs to counteract an unemployment rate of 18 percent, Vacher said.
