IMF Urges Tunisia to Cut Wage Bill, Energy Subsidies

Business

February 28th, 6:17am

Asharq Al-Awsat

FILE PHOTO: A vendor sells lemons at a market in downtown Tunis, Tunisia November 20, 2019. Picture taken November 20, 2019. REUTERS/Zoubeir Souissi

The International Monetary Fund urged Tunisia on Friday to cut its wage bill and limit energy subsidies to reduce a fiscal deficit. The IMF said in statement that monetary policy should focus on inflation by steering short term interest rates, while preserving exchange rate flexibility. Tunisia’s 2021 budget forecasts borrowing needs $7.2 billion including about $5 billion in foreign loans. With the coronavirus pandemic and protests since last month over social inequality, it is a time of unprecedented economic hardship in the North Africa country that ran a fiscal deficit of 11.5% of GDP in 2020. It puts debt repayments due this year at 16 billion dinars, up from 11 billion dinars in 2020, Reuters reported. The IMF said the service salary bill is about 17.6% of GDP, among the highest in the world.

from Asharq AL-awsat https://english.aawsat.com/home/article/2832241/imf-urges-tunisia-cut-wage-bill-energy-subsidies