Tunisia reaches an agreement with IMF on fifth review of loan

The International Monetary Fund (IMF) said on Wednesday it had reached a staff-level agreement with Tunisia on the fifth review of a loan.

The agreement will allow Tunisia to benefit from a disbursement of $247 million following the Executive Board’s review that is expected to take place by early June this year.

Tunisia concluded a deal with the IMF in December 2016 for a loan program worth around $2.8 billion to overhaul its ailing economy. It included steps to cut chronic deficits and heal public services.

“This will bring total disbursements … to about $1.6 billion and will help unlock additional financing from Tunisia’s other external partners”, the IMF said in statement.

Tunisia needs around $2.5 billion in external financing in 2019, officials said.

According to IMF sources, the negotiations with the IMF were “very difficult”, especially after the government this year raised the wages of 670,000 public employees, ending months of tension with the powerful UGTT union.

The IMF had wanted Tunisia to freeze public-sector wages – the bill for which doubled to about 16 billion dinars ($5.5 billion) in 2018 from 7.6 billion dinars in 2010.

In order to cut the energy deficit demanded by the IMF, the government last month raised fuel prices, the fifth hike in 12 months.


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