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Tunisia is struggling


The 2021 complementary finance law announces a deterioration of the country's accounts.



The new Tunisian government is unable to redress the accounts. (photo: Tunisian Presidency)
The new Tunisian government is unable to redress the accounts. (photo: Tunisian Presidency)
TUNISIA. Bypassing the Assembly of People's Representatives (ARP), the Tunisian executive of Kaïs Saïed published Tuesday 16 November 2021 by presidential decree the Supplementary Budget Law 2021. The text provides for an increase in the budget deficit of 38%. It should increase from 7.094 billion dinars (€2.19 billion) in 2020 to 9.792 billion (€3.02 billion) in 2021.

The rectified state budget is "forgotten" in the document, but it is expected to exceed 55.5 billion dinars (€17.13bn) according to economist Ezzedine Saidane. Tunisia has swelled its public workforce to 661,703 civil servants.

The slippage is also due to the doubling of the price of oil. This phenomenon was not anticipated in the initial budget devoted to hydrocarbon subsidies. Expenditure on this budget line alone will exceed government forecasts by at least 3 billion dinars. President Kaïs Saïed's team has tried to limit the damage by reducing public investment by almost half (-4.4 billion dinars or - €1.36 billion), but this is not enough to stop the budget deficit from widening. Tunisia will therefore become even more indebted, with 21.1 billion dinars (€6.52bn) planned for 2021, compared to the 18.7 billion (€5.78bn) initially planned. Public debt is expected to exceed 85% of GDP in 2021. A significant figure, but far from the peaks reached in France or Italy.

Also on Tuesday 16 November 2021, the Japanese rating agency R&I downgraded Tunisia's rating to B+ with a negative outlook and announced that it "will further lower the rating if the negotiation process between Tunisia and the International Monetary Fund (IMF) is prolonged. R&I sees Kaïs Saïed's coup d'état as a brake on the country's growth. It notes a budgetary deterioration that raises doubts about Tunisia's capacity to repay its debt in the medium term. According to R&I, the real gross domestic product fell by 8.8% in 2020. It should only grow by 2.6% in 2021 and then by 3.3% in 2022.

Gérard Tur


Thursday, November 18th 2021



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