Tunisia pays off all 2023 debt

Reuters/Jihed Abidellaoui

• Fears of default last year
• ‘Major challenges’ overcome
• $4bn debt to be paid this year

Tunisia has repaid all of its 2023 domestic and external debts despite constraints on public finance and difficulties in accessing foreign funding, according to finance minister Sihem Nemsia.

It had been feared that the North African country was headed towards a default on its debt repayments.

Speaking at the opening of a debate on the “2024 Finance Law and new tax provisions” by the Tunisia Council of Joint Chambers, Nemsia said the balance had been cleared.

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“In 2023, public finances faced major challenges due to a very tense regional and international context and an exacerbation of climate change, leading to a rise in inflation rates and in the prices of staple commodities on a global scale,” she said.

Inflation rose as high as 10.4 percent in February last year before dropping to 8.1 percent in December.

“All these constraints have had a major impact on Tunisia’s financial balance, sharply reducing the authorities’ room for manoeuvre in controlling debt levels and meeting essential and sometimes unpredictable public expenditure, despite the good results achieved in raising tax resources and improving the performance of some sectors (services, tourism, etc.),” Nemsia added.

The country has borrowed roughly TND1.15 billion ($360 million) in foreign currency from local banks since the beginning of 2023 under two syndicated loans.

Tunisia will pay $4 billion of foreign debts in 2024, a 40 percent increase on 2023, according to a report from Reuters.

The government expects the total public debt in 2024 to reach about TND140 billion, or about 79.8 percent of GDP, up from TND127 billion, the report added.

The recently published Ministry of Finance’s Medium-Term Budgetary Framework 2024-2026 document forecast a gradual reduction in Tunisia’s budget deficit over the next three years to 6.6 percent of GDP (TND11.5 billion) by the end of this year, 5.2 percent of GDP (TND9.8 billion) in 2025 and 3.9 percent (TND8 billion) by the end of 2026.