Tunisia successfully paid off its entire internal and foreign debt for the year 2023, despite significant financial pressure, according to Sihem Boughdiri, the country’s minister of finance.
This has eliminated concerns about Tunisia potentially defaulting on its debt.
According to an official document, Tunisia plans to repay $4 billion in foreign debt in 2024, which represents a 40 percent increase compared to the previous year. The Tunisian government has been facing challenges in securing external funding, and it is simultaneously working to stabilize its struggling public finances.
Read more: What is the IMF’s perspective on Egypt, Tunisia, and Lebanon?
Economists have observed that Tunisia heavily relied on new internal loans to repay its external debt. This approach has led to a decrease in liquidity and reduced banks’ ability to provide financing for the economy.
Given the increase in external debt and the difficulty of relying on internal loans frequently, economists anticipate that the situation will be particularly challenging for Tunisia this year.
In 2022, Tunisia reached a staff-level agreement with the International Monetary Fund (IMF) to secure a loan. However, the country failed to fulfill significant obligations outlined in the agreement.
It is expected that Tunisia’s total public debt in 2024 will reach approximately 140 billion Tunisian dinars (TND) (roughly $45.17 billion), equivalent to about 79.8 percent of the country’s GDP. This is an increase from the previous debt level of TND127 billion.
Targeting budget deficit reduction
The Ministry of Finance in Tunisia has set a target to reduce the budget deficit over the next three years. In 2024, the aim is to bring the deficit down to 6.6 percent of the gross domestic product (GDP). The ministry also plans to further decrease the deficit to 3.9 percent by the end of 2026, following a target of 7.7 percent for 2023.
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