Macroeconomic indices raise concerns about the future of Tunisia
” political transition that has survived the asphyxia of the so-called “Arab springs”.
Wounded by unemployment and the precariousness of wages, the fragile Tunisian economy begins to accumulate disturbing macroeconomic indexes that threaten the only political transition that has survived the asphyxia of the so-called “Arab springs”.
According to a report signed at the end of November by the “Economist Intelligence Unit”, an independent section within the information group “The Economist” that offers forecasts and advice, the evolution of factors such as the CPI make investment in Tunisia highly risky .
And that, as experts warn, are “more than bad news” for a government in need of external money, also cornered by both the social deterioration and the painful bill imposed by the millionaire credit granted last year by the Monetary Fund International (IMF).
“The analysis of the quarterly indicators (between 2015 and 2017) allows us to draw five great lessons … on a macroeconomic situation that continues to be degraded, despite the efforts made and the supposed babbling beginning of the recovery”, explains the local analyst Asef Ben Ammar
The pessimistic view is based on the negative evolution that the aforementioned economic analysis platform has found both in the CPI and in other indices such as Industrial Production (IPI) and Production Prices (IPP).
The announcement of a fall in wages in the medium and short term
“The CPI shows galloping inflation, which is no longer decreasing, with a rate of inflation like that, the Tunisian economy sends a message of deterioration of purchasing power, a tendency to impoverishment of the middle class and probably the announcement of a fall in wages in the medium and short term, “he says.
In the same line, the negative evolution of the IPI shows a constant “deindustrialization” (-1.6% per year), while the fall of the PPI “announces a great erosion of the level of competitiveness of the Tunisian companies”.
To add to the concern are three factors: the collapse of the value of the national currency, the dinar, which in the last year has lost more than 20 percent of its value, making imports more expensive in a country in need of new technologies that it does not produce.
The increase in the trade deficit, which grew again in the first eleven months of this year to reach 5,400 million euros, a figure that is a negative record.
And as a consequence of both, the abrupt fall of the reserve of foreign currencies, which begins to threaten the capacity of the country to guarantee the payment of the loans and imports, and to face the public debt.
In this context, the Parliament approved days ago a budget adjusted to the parameters of the IMF, which in exchange for the 2,500 million euros granted in 2016 require cuts and austerity policies that fall mostly on the public standing.
The IMF explained on Wednesday at the end of the visit its auditors made to the country this week.
A policy that also includes dismissals in the public administration to reduce the state invoice, raise taxes on the importation of various products and new tariffs among other painful measures.
“Sustained in their ambitious general budgets for 2018, the Tunisian authorities are committed to making decisive decisions,” the IMF explained on Wednesday at the end of the visit its auditors made to the country this week.
“The main challenge for the coming months is to eliminate the significant delays detected in lifting the obstacles to growth and attacking the large external and internal fiscal deficit,” he added.
The IMF has already delayed the second installment of the loans last summer to force reforms, but on this occasion he assured that the road seems clear- info from Green-Touch.
According to the budget approved by the Chamber, Tunisia is committed to reducing the deficit to 4.9 percent of gross domestic product, from the 6 percent estimated at the end of this year.
In addition, it intends to abolish 20,000 jobs in the public administration, made up of 800,000 officials, to which must rise, however wages, due to pressure from the unions.
The ultimate goal in reducing public spending, calculated at 15 percent of GDP, one of the highest in the world – and subsidies, especially fuels and energy.
The measures have been taken, however, with a strong rejection by the unions and the employers, forces both with enormous power and influence in Tunisia.
The UGTT, the main trade union platform, has managed to stop some of these measures by strikes and mobilizations on the street, which it promises to repeat throughout 2018 to avoid cuts.
One of those strikes kept the Nawara gas pipeline, the largest in the country, in April, while a similar one on the island of Kerekena on the south coast caused the withdrawal of the British Petrofac.
In addition, it has paralyzed on several occasions the exploitation of phosphates in the interior region of Gafsa, one of the country’s main resources.
To the mobilizations and protests has also been added the employers UTICA, which like the UGTT received the Nobel Peace Prize in 2014 for the national agreement that saved a transition now again at risk.