Tunisia expected to reach a deal on IMF loan in weeks, central bank governor says

Size of the loan still being negotiated, but could be between $2bn and $4bn

Young men hang out near the National Monument at Place de la Kasbah, as they talk and wach the passerbyes by on monday evening, April 18, 2011, in Tunis, the capital of Tunisia. The high unemployment, especially amongst the young, which in part sparked the country's January revolution, is only becoming more aparent as Tunisia enjoys its first few months of political freedom and stands at the beginning of its economic responsibility. (Silvia Razgova/The National)
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Tunisia expects to reach a deal with the International Monetary Fund in the coming weeks on a loan of between $2 billion and $4bn over three years, the central bank governor said on Sunday.

Tunisia, which is suffering its worst financial crisis, is seeking to secure an IMF loan to save public finances from collapse.

"The size is still under negotiation and I think it will be between $2bn and $4bn, we hope to reach a staff level deal in coming weeks," Marouane Abassi told Reuters.

The government and the powerful Tunisian General Labour Union (UGTT) last week signed a deal to boost public sector wages by 5 per cent, a step that may ease social tensions. But they did not announce any further agreement on reforms needed for an IMF bailout.

Mr Abassi said the wage deal was an important step for negotiations with the IMF and will give a clear view of the weight of wages in the country's gross domestic product in the future.

"It will give us a clear vision about the wage mass that is expected to decline in the coming years," he said.

Fitch Ratings said on Friday that Tunisia’s wage agreement raises the likelihood of an IMF deal.

Mr Abassi said the possible deal will open doors for bilateral financing, including with Japan and Gulf countries.

"We have advanced talks with Saudi Arabia about bilateral financing," he said.

The IMF has signalled it will not move forward with a bailout sought by Tunis unless the government brings on board the UGTT, which says it has more than a million members and has previously shut down the economy with strikes.

Tunisia is struggling to revive its public finances as discontent grows over inflation running at nearly 9 per cent and a shortage of food in shops because the country cannot afford to pay for some imports.

Updated: May 30, 2023, 12:30 PM