Tunisia initiates austerity measures to cut budget deficit – FinMin

By bne IntelliNews September 24, 2013

The Tunisian government has launched a basket of austerity measures including a 5% cut in public spending to help reduce the budget deficit which hovers around 7.0% of GDP, finance minister Elyess Fakhfakh was cited as saying by the state news agency TAP. The government has started the implementation of new mechanisms to streamline subsidies and help achieve more social justice, he added. The subsidy bill has climbed to TND 5.5bn (USD 3.35bn) in 2013 from just TND 1.5bn in 2010, Fakhfakh said. The new mechanisms to streamline subsidies seek to recover the same level achieved in 2010, he added.

The new state budget for 2014 also aims to achieve more fiscal stability, Fakhfakh underscored, adding that public wages will remain unchanged in 2014. In 2013, salaries have increased 5% compared to 2010, the minister said.

The Tunisian government wants to arrange a EUR 300-500mn loan from the European Union and will seek loan guarantees from the USA to secure budget needs in 2014, Fakhfakh said last week. The budget deficit should narrow to 6.5% of GDP in 2014 from a forecast 7.4% of GDP in 2013 as the government will impose new strict fiscal measures, he added. 

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