Tunisian Government Raises Fuel Prices for Second Time in Month to Reduce Budget Deficit

The Tunisian government has decided to raise fuel prices for the second time within a month as part of efforts to curb the budget deficit.

This decision came among other measures of reforms recommended by international lenders.

The Energy Ministry said in a statement that the price of a liter of gasoline will increase, starting today, Thursday, from 1.955 dinars to 1.995 Tunisian dinar.

The International Monetary Fund (IMF) urged Tunisia last month to slash the wage burden and reduce energy subsidies in order to reduce the fiscal deficit.

The recent decision places more pressure on the fragile government in light of the severe financial and political crisis looming over the country.

The IMF warned that the fiscal deficit would reach 9 percent of Gross Domestic Product ( GDP) in 2021 if Tunisia did not implement radical economic reforms, as the fiscal deficit reached 11.5 percent last year as the country was affected by Corona pandemic.

On the other hand, an International Monetary Fund official said that the Middle East region will witness an uneven economic recovery from the COVID-19 pandemic, as its countries move at a different pace to administer anti-disease vaccines, as well as the different ways to address the pandemic in terms of fiscal policy across the region.

"What we see today is still a race between the vaccine and the virus, and this will shape the recovery in 2021," said Jihad Azour, director of the Middle East and Central Asia Department at the International Monetary Fund.

"We will see a recovery in general, but it will be uneven, uneven, and volatile," he added.

He indicated that speeding up vaccination campaigns could improve growth prospects by between 0.3 and 0.4 percent.

The fund revised its growth forecasts in 2020 for the Middle East and North Africa region due to stronger than expected performance of oil-exporting countries and the failure of some countries to go through a second wave (from the Corona pandemic), which boosted non-oil economic activity in these countries.

The IMF said countries that moved quickly to introduce stimulus packages in the past year would see a better recovery.