IMF talks at Davos 'positive and promising', says Tunisian minister

Prime Minister Najla Bouden seeking bailout loan from IMF

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Tunisia's delegation received “positive and supportive signs” from the International Monetary Fund during talks held at the Davos Economic Forum in Switzerland, Minister of Economy Samir Saied told media on Friday.

Prime Minister Najla Bouden and IMF director Kristalina Georgieva met during the World Economic Forum in the Swiss mountains on Tuesday.

The international lender was still open to a loan but assistance was conditional on the ability of the government to introduce a plan of economic reforms, said Mr Saied.

Tunisia is seeking a bailout loan from the IMF to finance its 2023 budget.

In October 2022, the Tunisian government reached a staff-level agreement with the IMF for a new 48-month Extended Fund Facility worth about $1.9 billion to support the government's economic reform programme. The agreement will require approval from the IMF Executive Board.

However, the government’s reforms have been subject to a lot of criticism at home with the powerful Tunisian General Labour Union saying it focuses too heavily on imposing more austerity with subsidy cuts and taxes hikes.

The Economy Minister continues to insist that the government “only intends to redirect subsidies not entirely remove them".

“The current subsidies’ system is a failure and very costly for public finances,” Mr Saied told reporters.

“I have lots of hopes for the future of Tunisia and I am sure we will accomplish more things that would probably astonish you,” Ms Bouden said during a panel entitled “Achievement of the Century for Africa”.

“The time has come for Africa to rely on itself in facing imported crises such as poverty, climate change, and others,” Ms Bouden said.

Tunisia is undergoing the deepest financial crisis in its modern history and the government is struggling to revive public finances and prevent a growing shortage of essential goods.

The IMF has postponed its meeting to discuss Tunisia’s loan request to an unknown date.

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Updated: January 20, 2023, 6:03 PM