By Tarek Amara
TUNIS (Reuters) – Tunisia expects to reduce the fiscal deficit to 5.5% next year, down from about 7% expected this year and driven by austerity steps that could pave the way for a final deal with the International Monetary Fund on a rescue package.
The country has been in urgent need of international help for months as it grapples with a crisis in public finances that has raised fears it may default on debt and has contributed to shortages of food and fuel, according to government critics.
The Economy Ministry said on Friday that the country’s budget will increase by 14.5% in 2023 to 69.6 billion dinars ($22.3 billion). Economic growth will be 1.8%, compared with 2.5% expected this year, the ministry said.
The country’s external borrowing needs next year will increase by 34% to 16 billion dinars.
The ministry added that it expects inflationary pressures to continue as the government begins reforming subsidies.
Tunisia has reached a staff-level agreement with the IMF for a $1.9 billion rescue package in exchange for unpopular reforms, including cutting food and energy subsidies, and reforming public companies. It aims to reach a final deal in weeks.
($1 = 3.1079 Tunisian dinars)
(Reporting by Tarek Amara; Editing by Alexander Smith and Frances Kerry)
