Tunisia Meets the IMF: What’s at Stake?

Tunisia Meets the IMF: What’s at Stake?

Tunisia and the International Monetary Fund are in preliminary talks, with an eye on a potential multi-billion-dollar rescue deal for an economy plagued by recession, public debt, inflation and unemployment.

The North African nation on Monday started talks with the Washington-based crisis lender, which has called for "deep reforms" and public spending cuts.

But many Tunisians, already struggling to make ends meet, fear a deal that involves painful reforms could leave them much worse off.

Why is Tunisia seeking a new loan?

Tunisians have endured a decade of economic stagnation since the revolt in early 2011.

Two previous IMF loan deals, for $1.7 billion in 2013 and a further $2.8 billion in 2016, have done little to fix the country's public finances.

The coronavirus pandemic put the economy on life support, with a deep recession that sent 80,000 small and medium-sized firms into bankruptcy or out of the country since early 2020, according to official data.

Over the same period, unemployment has surged from 15.1 to 18.4 percent and inflation has eaten away at people's buying power.

Since the revolution, per capita GDP has dropped by a fifth and the dinar has fallen by 40 percent against other currencies.

But economist Ezzedine Saidane said Tunisia's biggest challenge is its