Tunisia is facing major structural challenges that result in deep macroeconomic disequilibria, a weak growth in spite of its strong potential, a high unemployment rate, weak investment, and social inequality, International Monetary Fund has said.
The impact of the pandemic and the war in Ukraine are now adding to these structural challenges, according to an IMF mission visiting Tunis March 23–25, which held discussions on the Tunisian authorities’ reform program.
The discussions also covered the impact of the war in Ukraine, which poses important challenges for the entire world and for Tunisia, right at the moment that the country is emerging from the pandemic.
The IMF said in a statement that the authorities’ program aims to overcome these challenges in a durable and equitable way.
“In the short term, it aims to mitigate the impact of the war in Ukraine, while in the medium term, to assure stronger, durable inclusive growth and social protection. In that context, the program seeks to create fiscal space for public investment and increase social protection,” the statement said.
The IMF said it considers that a conscientious reduction of the fiscal deficit through equitable taxation reform, strict control over the public sector wage bill, better targeted subsidies, and deep reforms of state-owned enterprises are necessary to restore macroeconomic stability, as well for improving the efficiency of state-owned enterprises, and strengthening the competitiveness of the Tunisian economy.
Initiatives aimed at enhancing competition and the business climate are also critical to unlock the country’s potential growth and job creation, the statement added.