Tunisia: Inflation to top 10 % in 2023, deepening economic & political crises

Inflation will continue to soar in Tunisia reaching 10.5 pc in 2023 against 8.3 pc expected in 2022 deepening further the economic and political crisis rocking this country.

The announcement of the inflation projection was made by Tunisian economy minister Samir Saeed at a press conference. “2023 will be a difficult year”, said the minister, noting that the Tunisian government has no alternative to an agreement with the International Monetary Fund, referring to a $1.9 billion rescue package to help the country with its borrowing needs next year.

Tunisia relies heavily on food and energy imports, and its economy has also been hit by unrest amid the worst political tensions in a decade.

Following the lowest ever electoral turnout (8.8 pc) recorded in the Tunisian parliamentary elections held Dec.17, the opposition called on President Kais Saied to resign, saying he had lost his legitimacy as voters overwhelmingly boycotted the elections.

The country has plunged into political uncertainty after President Kais Saied suspended parliament and introduced a new constitution, reducing the prominence of political parties. These moves have been described as a coup against democracy, prompting regional and international concerns over the country’s stability.

Commenting the lower voter turnout, the U.S. State Department said the fall in votes “reinforces the need to further expand political participation over the coming months”.

“We reiterate the importance of adopting inclusive and transparent reforms, including empowering an elected legislature, establishing the Constitutional Court, and protecting human rights and fundamental freedoms for all Tunisians”, stressed the U.S. government.

“We will continue to support the Tunisian people’s aspirations for a democratic and accountable government that protects free expression and dissent and that supports civil society. We also urge the Tunisian government to take the necessary steps to address the current economic crisis and achieve long-term stability and prosperity for all Tunisians”, underlined the U.S State Department.

Tunisia’s trade deficit widened by record 56% in the first semester of 2022, reaching 8.1% of GDP, while the budget deficit, exacerbated by mounting energy and food subsidies, is expected to reach 9.1% in 2022, compared to 7.4% in 2021, according to the World Bank’s latest report.

The slow economic recovery from COVID-19 and a delay in carrying out key reforms, including of subsidies, is likely to further strain Tunisia’s public finances and deepen budget and trade deficits, warned the World Bank.