Tunisia aims to reduce its deficit even as the virus and politics weigh in

Tunisia

Tunisia TunisiaTunisia expects its budget deficit to shrink next year, despite the fact that the North African country is still struggling to recover from a coronavirus outbreak and a persistent political turmoil.

Finance Minister Siham Namsia stated Tuesday that the economy will expand at a rate of 2.6 percent next year, down from 2.8 percent this year. The budget deficit is predicted to shrink from 8.3% to 6.7 percent.

The budget for 2022 was long overdue in a country where political paralysis has reigned since President Kais Saied dismissed his prime minister and halted parliament in July, actions that his detractors termed a coup. The initiatives, according to Saied, are vital to steer the country away from the path to destruction that administrations have plotted since the 2011 uprising that deposed President Zine El Abidine Ben Ali.

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Since then, an already-struggling economy has struggled much more, with the need for a deal with the International Monetary Fund growing progressively amid fears about the country’s capacity to satisfy creditor obligations. Officials have stated that an agreement with the Washington-based fund is expected in the first quarter, and that they will maintain adequate foreign reserves to satisfy their obligations.

The government will boost fuel prices again in 2022, according to Namsia, a decision that is expected to enrage powerful labor unions who have previously opposed tax rises and price increases. She stated that the whole budget is 57.2 billion dinars ($19.9 billion), up 3.2 percent from 2021, and is based on crude oil at $75 per barrel. The country’s funding requirements are estimated to be 18.6 billion dinars, with 12.6 billion dinars coming from overseas.

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