Tunisia: Following the agreement with the UGTT union, the government hopes to be able to release financial support from the IMF in the amount of 2 to 4 billion dollars

The Tunisian government expects to secure an agreement with the International Monetary Fund (IMF) by the end of October. According to the Minister of Employment and government spokesman, Nasreddine Nsibi (photo), the Tunisia file will be submitted to the Fund’s board of directors next month.

This announcement comes a few days after the signing of an agreement between the Tunisian authorities and the Tunisian General Labor Union (UGTT) which demanded social measures from the government. In a context of economic crisis characterized by rising inflation, the agreement provides for a 5% increase in public sector wages.

Beyond the easing of social tensions that this measure should generate, the agreement between the government and trade unionists opens the way to obtaining financial support from the IMF. The Bretton Woods institution had indeed insisted that the authorities reach an agreement with the workers, before studying the possibility of an agreement.

“The amount is still under negotiation and I think it will be between 2 and 4 billion dollars. We hope to reach an agreement at the staff level in the coming weeks,” Marouan Abassi, governor of the Tunisian Central Bank, told Reuters.

As a reminder, last July, the American bank Morgan Stanley indicated that Tunisia is the African country most at risk of defaulting on its debt, in particular because of a “budget deficit of nearly 10%, one of the highest public sector wage bills in the world”. Following the American bank, the credit rating agency Fitch had also lowered the country’s sovereign rating from “B-” to “CCC”, estimating that a public deficit of 8.5% of GDP this year would increase its debt-to-GDP ratio to 84%.

At the end of July, the IMF had welcomed the productive discussions it had had with the government.