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Tunisia’s central bank governor warned on Wednesday (Jan 4) that difficult times lie ahead without a swift IMF deal.
The country is suffering from debt equivalent to almost 90% of GDP. In mid-October, a basic agreement was reached with the International Monetary Fund for a package worth about $2 billion.
We are currently awaiting IMF approval to access other sources of credit.
“We hope to reach an agreement with the IMF as soon as possible to mobilize external funds allocated in the budget,” said Marouane El-Abbasi.
“Subsidies on basic commodities, especially energy, will also be phased out over three to four years and prices will rise significantly,” he said.
The IMF was originally scheduled to approve the deal on December 19, but it has been postponed.
Abasi said the delay was due to an unprepared Tunisian budget.
The IMF, among other things, called for a law to restructure more than 100 state-owned enterprises. These state-owned enterprises hold monopolies and some have debt.
The law is under deliberation and will be submitted to the Cabinet.
Tunisians, like all Tunisians, are grappling with slow economic growth and runaway inflation. Trade unions opposed any IMF deal last June.
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