Tunisia Cuts GDP Growth Forecast to 2.6% in 2021

Tunisia cut its 2021 GDP growth forecast to 2.6%, down from a previous forecast of 4%, according to Reuters.

The North African country is facing the worst economic crisis after its economy contracted by 8.8 percent last year and the fiscal deficit reached a record level of 11.4%.

The fiscal deficit in the latest forecast will reach 8.3% in 2021, up from 6.6% expected earlier.

"The debt ratio would reach 85.6% of GDP by the end of the year compared to 79.5% previously expected," Reuters said, adding that fuel subsidies rose from $138 million earlier this year $1.15 billion.

This month, Tunisia resumed talks with the International Monetary Fund (IMF) over a loan package based on liberalizing the economy.

Talks with the IMF on a package were halted on July 25 when President Kais Saied dismissed the cabinet, and the parliament.