Tunisia is planning to cut its fiscal deficit to 5.5 per cent in 2023, down from 7.7 per cent this year, as the country continues its efforts to boost economic growth through austerity programmes.
The report by the Ministry of Economy and Planning, says that spending on subsidies and financial transactions will decrease by 26.4 per cent and 56.5 per cent, respectively, while tax revenue will increase by 12.5 per cent next year, according to Tunis Afrique Presse.
In addition to covering the budget deficit through 14.2 billion dinars in “budget support credits”, Tunisia plans to raise 24.1 billion dinars ($7.7 billion) through external borrowing, 66.2 per cent of which will be financed by external borrowing, according to the news agency.
The IMF agreed to help Tunisia after it fell on hard times because of the conflict in Ukraine, which widened Tunisia’s current account deficit, and because of the coronavirus-induced economic slowdown, high debt, and poor financial condition.
Tunisia is also hoping to receive $4 billion in funding from the IMF, which would provide the country with the financial and economic support it needs to overcome its worst economic and financial crisis, which has been exacerbated by rising energy and commodity prices globally.
Tunisia signed a staff-level agreement with the IMF in October for a new 48-month Extended Fund Facility (EFF) worth about $1.9 billion to support the government’s economic reforms. The Washington-based lender said that a final agreement on the deal would be reached this month.
According to the IMF, Tunisia’s economy is projected to grow by 2.2% this year. The Tunisian authorities recently raised the cost of water by as much as 23 per cent to help cut subsidies to receive IMF aid.
Image Credit: Nasonurb/Flickr
