Tunisia Secures $175 Mln Loan to Bolster 2024 Fund

Tunisia’s Finance Ministry announced on Thursday that the government has secured a syndicated loan worth $175 million from 16 local banking institutions to support the 2024 budget.

This financial move comes at a time when the country is grappling with a shortage of external funding.

Finance Minister Sihem Boughdiri stated that the syndicated loan would contribute to stabilizing Tunisia's foreign currency reserves.

Earlier this month, the Tunisian government also raised approximately $500 million through a national subscription campaign.

Tunisia is currently facing a severe financial crisis, further compounded by the suspension of a potential program with the International Monetary Fund (IMF).

This program would have provided Tunisia with $1.9 billion in funding, but the final agreement has stalled.

A recent report by the World Bank highlighted that Tunisia's economic recovery has unexpectedly faltered in 2023 due to severe drought, tight financing conditions, and a slow pace of reforms.

The report indicated that this slowdown has left Tunisia's economy in 2023 below its pre-pandemic level, marking one of the slowest recoveries in the Middle East and North Africa region.

Official data shows that Tunisia's economic growth slowed to 0.2% in the first quarter of this year, compared to 1.1% in the same period last year.

Additionally, the unemployment rate rose to 16.2% in the first quarter, up from 16.1% in the same period last year.

This financial situation underscores the significant challenges Tunisia faces in securing sustainable economic stability and growth. The government's recent financial maneuvers, including the syndicated loan and national subscription, are critical steps in addressing the immediate budgetary needs and maintaining economic stability in the short term.

However, the broader economic recovery and long-term stability will require substantial reforms and more robust financial strategies.