Tunisia Needs to Create Jobs, Contain Debt

International Monetary Fund staff and the economic team of the new government in Tunisia agreed that front and center of all reform efforts is the need to create jobs and contain debt.

Better managing the public-sector wage bill, which is among the highest in the world and absorbs half of total expenditure, will be indispensable. The team noted the authorities’ commitment to translate their reform ambitions into action in the 2018 budget bill, reads a statement by an International Monetary Fund mission at the end of a visit to Tunisia, TAP reported.

An IMF staff team, led by Bjoern Rother, visited Tunisia on October 4–6 to discuss the country’s recent economic developments and the authorities’ policy plans under Tunisia’s economic reform program supported by a four-year IMF Extended Fund Facility arrangement.

“Specifically, the budget bill would focus on reducing the deficit through comprehensive tax reform and rationalizing inefficient expenditure. It would also dedicate more resources in support of small and medium enterprises. Executed within an adequate framework, investments through public-private partnerships could improve the quality of infrastructure and help free up resources for other high priority spending on health and education,” reads the press release.

Ensuring the sustainability of the social security system, improving governance and oversight of loss-making public enterprises, and modernizing the civil service remain critical structural reforms to reduce fiscal risks and make the overall economy more competitive, the IMF team emphasized.