IMF Urges Tunisian Consensus Before Reform Program

(Bloomberg) -- Tunisia should explain the country's fragile economic situation to its people and ensure they support any planned reforms before discussing a new program with the International Monetary Fund, a fund official said.

A key priority for the government will be to devise a mechanism to deal with mounting debts on the part of state-owned entities - dues which account for about 40% of the gross domestic product, the fund's mission chief to the North African nation, Chris Geiregat, said Tuesday in a press briefing.

“Before we adopt a new program with the IMF, it will be important for authorities to start explaining to the population the severity and fragility of the situation,” he said, stressing that the government must include all “stakeholders” in the discussions. The longer it takes authorities to reach “social consensus” on the reforms, the more difficult the situation will become, Geiregat said.

IMF Urges Tunisia to Lower Wage Bill, Limit Energy Subsidies

To break with the “tepid performance of the past,” Tunisia will need deep structural reforms, but this time authorities must ensure these are “strongly implemented” and not just adopted, he said.

“We have made it clear that if we see a clear reform program” that benefited from a national dialogue, “then we will support you,” Geiregat said.

Geiregat also said:

• Tunisia central bank needs to be vigilant about stability of banking sector, because impact of coronavirus hasn't fully surfaced in banking sector
• Central bank needs to also devise plan for post-Covid recovery for the sector

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