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IMF says ready to begin aid talks with Tunisia

AFP . Washington
23 Jun 2022 15:57:38 | Update: 23 Jun 2022 15:57:38
IMF says ready to begin aid talks with Tunisia
A women looks at dates at a market in Tunis amid growing fears of austerity in Tunisia — Reuters Photo

The International Monetary Fund is set to begin formal talks on a new financial aid package for Tunisia, to help the North African nation deal with the dire economic situation, an IMF official said Wednesday.

The country has been in preliminary discussions with the global lender for a new loan to save an economy ravaged by years of high unemployment, inflation and public debt even pre-dating its 2011 revolution.

"After several months of technical discussions we are ready to start program negotiations in the coming weeks," said Jihad Azour, the IMF Middle East and Central Asia chief.

Azour visited Tunisia this week, meeting with President Kais Saied and other officials, and welcomed a recent government reform program to deal with the situation that has been exacerbated by the spillovers from the war in Ukraine.

"The severity of the economic situation makes the need for swift implementation of ambitious reforms evermore pressing," Azour said in a statement.

But he said those reforms must benefit the people.

"Tunisia needs to urgently tackle its fiscal imbalances" including "replacing generalized subsidies with transfers targeting the poor, strengthening its social safety net," he said.

The government reform plan includes a freeze on the public sector wage bill, some subsidy cuts and a restructuring of state firms.