Tunisian legislature to draft state budget and financial reforms
Tunisia’s Assembly of the Representatives of the People will begin examining the state budget today. The draft budget includes the budgets of the ministerial departments and other state institutions.
The national economy was already precarious before the COVID-19 pandemic as it relies heavily on international donors as well as service sectors such as tourism (a major source of the country’s foreign currency exchange). The pandemic has hit the economy hard, leading to soaring unemployment. Its effect on public finances and tourism has been devastating. External debt has reached 75% of the GDP, leaving the country little room to manoeuvre and sustain growth.
With public finances deteriorating sharply, recourse to external debt remains essential in order to mobilise the financial resources necessary for budgetary balance. Expect Tunis to implement austerity programs and face increased social demands ahead of the budget’s expected approval by early December. Almost ten years after the Arab Spring began in Tunisia, an economic and social crisis could endanger the country’s fragile democracy.
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