IMF reaches staff-level agreement with Tunisia for loan program
TUNIS — Tunisia has reached a preliminary agreement with the International Monetary Fund (IMF) for a $1.9 billion rescue package that could be finalized in December, the fund said on Saturday.
Tunisia 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.
Opposition politicians and Tunisia’s powerful UGTT labor union have warned of a possible “social explosion” if people’s needs are not met, with a petrol shortage causing long queues this week at fuel stations.
The staff-level agreement is for a 48-month package through the IMF’s extended fund facility to restore macroeconomic stability, strengthen social safety nets and tax equity and bring reforms that would foster growth and create jobs.
Tunisia’s economy had already been badly buffeted for years as political uncertainty and militant attacks hit its crucial tourism sector even before fresh challenges from the COVID-19 pandemic and global commodities squeeze from the Ukraine war.
The IMF warned that in the near term growth would likely slow with more pressure on inflation and on the external and fiscal balances. (Reporting by Moataz Mohamed in Cairo and Andrea Shalal in Washington; writing by Angus McDowall; editing by Philippa Fletcher)
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