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October 12, 2023 5:11 PM IST

IMF official says Tunisia has not proposed new loan terms, needs to cut subsidies

IMF | Tunisia | Central Asia | middle east

Tunisia has not made new proposals for terms of a long-delayed $1.9 billion International Monetary Fund loan, but should eliminate wasteful and socially unfair subsidies, IMF Middle East and Central Asia director Jihad Azour said on October 9.

Azour told a news briefing at IMF-World Bank annual meetings in Morocco that such subsidies needed to be changed before the IMF board could approve a preliminary staff-level agreement for Tunisia.

Azour said that fuel subsidies, for example, were benefiting mainly wealthy Tunisians and were a “fiscal waste” at a time of high oil prices.

“By reforming the subsidy, you could allow more resources to go to finance inclusion and increase social stability,” he said.

The country has been waiting for more than a year for the programme’s approval. Azour said that a new IMF mission would visit Tunisia to meet with authorities and take stock of recent economic developments, but he did not provide details on timing.

(Inputs from Reuters)

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