The International Monetary Fund said engagement continues with Tunisia over a $1.9 billion rescue package, even after President Kais Saied vowed to reject any deal involving spending cuts.
(Bloomberg) — The International Monetary Fund said engagement continues with Tunisia over a $1.9 billion rescue package, even after President Kais Saied vowed to reject any deal involving spending cuts.
Tunisia’s government has “made initial progress in implementing their home-grown economic-reform program” and a new IMF board date “will be set in consultation with the Tunisian authorities, once the program requisites are in place,” a spokesperson for the lender said Monday in an emailed response to questions.
The North African nation’s central bank governor and economy and planning minister are attending this week’s IMF and World Bank meetings in Washington, according to state media, although the finance minister is not.
Tunisian bonds plunged the most worldwide on April 6 after Saied expressed his opposition to what he called foreign “diktats” that could further impoverish the cash-strapped country. Tunisia and the IMF reached a staff-level agreement in October, but the deal has yet to be reviewed for approval by the multilateral lender’s directors.
The prospect of extensive spending cuts, including for the nation’s sprawling public sector, has sparked regular criticism and threats of strike action from UGTT, Tunisia’s largest trade union. The organization cautiously welcomed Saied’s remarks, urging him to follow words with action.
Ennahda, which is Tunisia’s largest opposition party and comprises moderate Islamists, warned that Saied’s “refusal to negotiate with the IMF without offering any alternatives could precipitate chaos” and lead to the country’s collapse.
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