IMF official urges ‘deep reforms' to Tunisian economy
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Loading... - Megan Miller
- 17 Jan 2022
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Tunisia’s crisis-stricken economy needs “deep reforms” such as slashing its vast public wage bill, the International Monetary Fund’s outgoing country chief has said as the government seeks a new bailout.
Jerome Vacher, speaking in an interview at the end of his three-year term as the global lender’s envoy to the North African country, said the coronavirus pandemic had helped create Tunisia’s “worst recession since independence” in 1956.
“The country had pre-existing problems, in particular budget deficits and public debt, which have worsened,” he said.
Tunisia’s debts have soared to nearly 100 percent of Gross Domestic Product.
Its GDP plunged by almost nine percent in 2020, the worst rate in North Africa, only modestly offset by a three percent bounceback last year.
That is “quite weak and far from enough” to create jobs to counteract an unemployment rate of 18 percent, Vacher said.
He said young graduates face particular challenges in finding work, despite the country being able to offer “a qualified workforce and a favourable geographic location”.
Since dictator Zine El Abidine Ben Ali was toppled by mass protests in 2011, Tunisia’s troubled democratic transition has failed to revive the economy.
President Kais Saied sacked the government and suspended parliament on July 25 last year, and the government has since asked the IMF for a bailout package — the fourth since the revolution.
Tunisian authorities say they are optimistic about reaching a deal by the end of this quarter.
Vacher said discussions are still at an early stage and that the IMF first wants “to understand what they’re planning in terms of economic reforms”.
“It’s an economy that needs very deep, structural reforms, especially to improve the business environment,” the French economist said. Read More…
