Tunisia to borrow $7b more in 2022

TUNIS — Tunisia unveiled a 2022 budget on Tuesday that will see it borrow almost $7 billion more, as it seeks to stimulate an economy battered by the coronavirus pandemic.

The 2022 finance law boosts spending by over three per cent year on year to 57.3 billion dinars ($19.8 billion, 17.6 billion euros), Tunisia’s Finance Minister Sihem Boughdiri said.

The deficit is expected to hit some 6.2 per cent of gross domestic product (GDP), she told reporters.

The government will borrow almost 20 billion dinars ($6.9 billion, 5.7 billion euros) to cover 2022 expenditures, bringing government debt to 82.6 per cent of GDP.

Around two thirds of the figure is to come from foreign lenders, and the remainder from domestic sources, Boughdiri said.

Tunisia has suffered years of economic woes exacerbated by the coronavirus pandemic, with high inflation and unemployment at around 18 per cent. Foreign debt in 2021 hit 100 per cent of GDP.

In order to replenish state coffers, the authorities are also hoping to reach a bailout deal with the International Monetary Fund (IMF), Boughdiri confirmed.

"Negotiations with the IMF will restart at the beginning of 2022," Boughdiri said.

She said 80 experts had formulated "a programme of reforms in several sectors".

Tunisia's previous government had been in talks with the IMF over a new bailout package, when President Kais Saied in July sacked ministers and seized far-reaching powers.

A deal with the global lender could entail politically painful reforms, such as cutting subsidies on basic goods or tackling the wage bill of a public sector that employs some 680,000 of the country's 12 million inhabitants.