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Financial crisis: Tunisia ready to take IMF loan in weeks

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Financial crisis has forced decision on Tunisia to reach a deal with the International Monetary Fund in coming weeks for a loan of between two billion U.S. dollars and four billion dollars over three years.

Tunisia’s Central Bank Governor Marouan Abassi said that the country, suffering its worst financial crisis, was 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 two billion dollars and four billion dollars. We hope to reach a staff level deal in coming weeks,” Abassi said.

The government and the powerful Union Generale Tunisienne du Travail (UGTT), last week, signed a deal to boost public sector wages by five per cent, a step that may ease social tensions.

Abassi said that the wage deal was an important step for negotiations with the IMF and would give a clear view of wages’ weight in GDP in coming years.

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

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

“We have advanced talks with Saudi Arabia about bilateral financing,” he added.

The IMF has signaled that 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 economy in strikes.

Tunisia is struggling to revive its public finances as discontent grows over inflation running at nearly nine per cent and a shortage of many food items in stores because the country cannot afford to pay for some imports. (NAN)

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