Tunisian head of government Hichem Mechichi announced on Tuesday that the budget deficit would hit a record high in 2020, at around 14% of GDP, calling on the Central Bank to finance it to limit the current crisis in the country.
” Our country has never known such a deep crisis,” said Hichem Mechichi during a press conference in Tunis. The International Monetary Fund has already said it expects a historic decline in GDP in Tunisia, to -7% for 2020, due in particular to the consequences of the Covid-19 pandemic.
This situation is also the result of the accumulation of several years of economic, social, and political instability, as estimated by Mr. Mechichi. Since the 2011 revolution, nine governments have succeeded, hampering the adoption of fundamental reforms to revive a struggling economy.
The budget deficit in 2020 will reach 14% of GDP, and ” it is only possible to reduce this rate by two points by postponing the repayment of debts, ” said Mechichi. The IMF’s four-year financing plan came to an end in the spring, with no prospect for the future, while Tunis, which has relied heavily on international donors in recent years, is struggling to complete its budget for 2020.
The solution is the Central Bank, according to Hichem Mechichi
For Hichem Mechichi, the solution is the Central Bank, which is ” aware of its role in limiting this current crisis ” to help finance this deficit. The Central Bank of Tunisia criticized last week a deficit deemed excessive and a recourse deemed too heavy on domestic financing in the complementary finance law.
“ It is necessary to go back to work! “, Hammered the head of government, adding that” it is no longer acceptable to allow protests which block roads and which hamper the exploitation of the country’s wealth “such as oil and phosphate.
” We are completely ready to apply the law using the force of the state, ” he warned, stressing the costs entailed by these social movements.
