Sun. Sep 8th, 2024

The Tunisian government plans to request extraordinary direct financing from the central bank of 7 billion dinars ($2.25 billion) to plug a budget deficit this year.

This comes in light of the scarcity of external financing, the difficulties facing public finances, and the country’s dependence on internal borrowing to repay external debt.

The move highlights the severe difficulties facing Tunisia’s public finances, which will pay $4 billion in external debt in 2024, a 40 percent increase compared to 2023.

Abdul Jalil al-Hani, deputy chairman of parliament’s finance committee, told Reuters the government had introduced a bill demanding an extraordinary revision to allow the central bank to provide one-time facilities to the treasury.

Two other lawmakers confirmed the news to Reuters, adding that the bill includes direct financing of 7 billion dinars over 10 years at an interest rate of up to 0 percent.

The cabinet last week approved a controversial bill that would allow the central bank to finance the treasury, in a move that has heightened concerns among economists and experts about the bank’s independence.

Last year, President Kais Saied said the law should be revised to allow the central bank to finance the budget directly by buying state bonds, a move that central bank governor Marwan Abbasi warned against.

 

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