Tunisia to Soften Reforms

Tunisia plans to launch long-awaited reforms to reduce its chronic budget deficit, but the measures could harm investment if the government imposes new taxes and resists cutting the bloated public sector in order to avoid social unrest, Reuters reported. The International Monetary Fund is in Tunis this week to review the government’s efforts to fix an economy in turmoil since President Zine El-Abidine Ben Ali was ousted in the first of the Arab Spring rebellions in 2011. Tunisia has been praised as the only democratic success among the Arab Spring nations. But economic performance has lagged, with phosphate exports hit by strikes and tourism suffering from Islamist attacks. Hoping to secure further IMF finance to fund the 2018 budget, Economic Reforms Minister Taoufik Rajhi said the government would launch “unprecedented reforms” to cut the deficit to 4.9% in 2018 from 6% this year. Tunisia wants to reduce the public workforce by 20,000 from 800,000, overhaul loss-making state firms, and increase taxes and social security contributions, Rajhi told Reuters.