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New Tunisian Government Faces Economic Challenges

New Tunisian Government Faces Economic Challenges

Saturday, 17 November, 2018 - 13:00
A gas station attendant pumps fuel into a customer's car at a gas station in Tunis, Tunisia June 01, 2018. REUTERS/Zoubeir Souissi
Tunis - Al Munji Al Saidani
The Tunisian government, which received the parliament’s vote of confidence this week, faces a number of economic and social challenges amid a record trade deficit of around TND16 billion, a 7.5 percent inflation, a budget deficit of 4.9 percent of GDP, a loss in the value of the local currency and high unemployment.

Prime Minister Youssef Chahed has affirmed, during his speech at the Tunisian parliament, that the cabinet’s top priority is economic reform.

The government is currently working on controlling inflation to stop a drop in the purchasing power of Tunisians through several mechanisms mainly rationalizing imports, setting a list of 222 exported goods not funded by the central bank and limiting random importing.

In this context, Tunisian Economic and Financial Expert Saad Boumakhla expected the Tunisian government to face several obstacles. 

According to Boumakhla, Tunisia is seeking to fulfill its pledges towards syndicates and to increase the salaries of public sector employees. The government is also under pressure by international funding institutions especially the International Monetary Fund (IMF), he said.

He stressed, however, that all of the country’s factions should participate in economic revival and achieving a growth rate. It is possible to have a 5 percent growth in case of better conditions and a more attractive investment climate.

Tunisia’s trade deficit widened by 21 percent year-on-year in the first 10 months of 2018 to a record 15.9 billion dinars (USD5.6 billion). Furthermore, Tunisia’s exports posted a rise of 20.2 percent, as a result of the loss in the dinar’s exchange value.

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