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Tunisia lawmakers expect 3 percent growth as 2015 budget is approved

By Tarek Amara in Tunis
Posted on Thursday, 11 December 2014 09:17

The 29 billion dinar ($15.69 billion) budget is 6 percent bigger than this year’s.

It forecasts a budget deficit of 5 percent of gross domestic product next year, less than the 5.8 percent estimated for this year.

Development spending will rise to 5.8 billion dinars ($3.14 billion) from 5.3 billion dinars ($2.87 billion) in 2014.

The government, which will be replaced early next year after the north African country’s first full parliamentary elections in October, has said at least three more years of painful and politically difficult reforms are needed to revive growth following Tunisia’s 2011 revolution.

These will include tax changes and subsidy cuts.

The main secular party Nidaa Tounes won the October election with 86 of the parliament’s 217 seats and will lead a new government to be formed early next year.

Islamist party Ennahda took 69 seats and smaller parties the rest.

Tunisia agreed a two-year, $1.78 billion loan programme with the International Monetary Fund in July 2013 under which it must pursue economic reforms.

The country will remain heavily dependent on foreign financing next year as it recovers from instability that followed a 2011 revolt to oust autocrat Zine El-Abidine Ben Ali.

According to the budget, Tunisia must raise 7.4 billion dinars ($4 billion) of financing next year, of which 4.4 billion dinars ($2.38 billion) will come from foreign sources.

Subsidies costs will be reduced by 16 percent to 3.7 billion dinar ($2 billion) in 2015.

The budget does not outline any increase in public sector wages, despite a threat by the powerful UGTT labour union to launch strikes if pay rises were not included.

The need to push through economic reforms may yet force Nidaa Tounes into coalition with Ennahda, which won elections to a temporary national assembly in 2011 after Ben Ali’s overthrow in the first of the Arab Spring revolts.

After three years in government and a political crisis that almost ended Tunisia’s transition, Nidaa Tounes – a party led by former Ben Ali officials – overtook its Islamist rival to emerge as the country’s leading political force.

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