Tunisia -

Experts and specialists in economic affairs unanimously agree that public finances in Tunisia are going through its darkest period, in light of the lack of liquidity to cover budget expenditures, and the disruption of negotiations with international donors, at a time when attention is turning towards the decisions that the new government will take to get out of this crisis.

Prime Minister Najla Boden confirmed that her government's priorities will focus on "creating balances for public finances and proceeding with the necessary economic reforms", and stressed the importance of unifying efforts to get out of the economic crisis.

scarce financial resources

The statement of the Board of Directors of the Central Bank of Tunisia - which was described as shocking and disturbing - is still preoccupied by economists and even politicians, after expressing concern about the severe scarcity of the state's external financial resources, in return for important needs to complete the financing of the state budget for the year 2021.

The central bank justified the lack of liquidity by the concerns of international lenders in light of the deterioration of Tunisia's sovereign assessment and the absence of a new program with the International Monetary Fund.

The bank's board of directors warned against going towards cash financing, or what is known as "printing securities", because of its negative repercussions on inflation rates, foreign currency reserves and the exchange rate of the dinar, in addition to its negative impact on Tunisia's image before international donors and sovereign numbering agencies.

reserve dip

Tunisia's foreign exchange reserves decreased by 9.5%, to 20.9 billion dinars ($7.4 billion) in September, compared to 23 billion dinars ($8.16 billion) during the same period in 2020.

The former Minister of Commerce, Mohsen Hassan, told Al Jazeera Net that the first challenge for the Boden government lies in working to mobilize resources externally and internally in light of the high deficit in the state budget for the current and next years.

He pointed out that the deficit in the state budget has become a real dilemma, whether it is to cover the expenses of the remainder of the last quarter of 2021 at a value of $3 billion, or for the year 2022 with regard to the external commitments of the Tunisian state.

He pointed out that the statement issued by the Central Bank administration on the state of public finances is a clear message from it to the President of the Republic, that we are heading towards bankruptcy if the matter is not remedied.

An economist acknowledged the difficulty of Tunisia reaching an agreement with the International Monetary Fund to solve its crisis (Getty Images)

monetary fund

The economist acknowledged the difficulty of Tunisia reaching an agreement with the International Monetary Fund to resolve its crisis, due to the state of the Boden government, which is an interim government under exceptional measures, as well as the fact that the donor countries - led by the United States - see that Tunisia is still in a stage of "uncertainty." political".

On the possibility of Tunisia heading to the global financial market to overcome the impasse of lack of liquidity and finance the budget deficit, Hassan ruled out the matter due to the deterioration of Tunisia's sovereign numbering.

Last Thursday, Moody's credit rating agency lowered Tunisia's sovereign rating from "B3" to "Caa1" while maintaining negative expectations, and lowered the unsecured ratings of the Central Bank from "B3" to "CAA1". .

The agency explained - in its statement - that "the reduction is due to weak governance and the growing belief that the Tunisian government is unable to implement the measures and procedures that guarantee the arrival of the necessary funds to meet the high requirements over the next few years."

Last February, the same agency lowered Tunisia's credit rating from B2 to B3 with a negative outlook, which observers considered a setback for the Tunisian economy.

This classification comes with the economic contraction rate reaching 8.8%, with an unprecedented rise in the external debt ratio to about 110% of the gross domestic product, while the unemployment rate jumped to about 17.8% during the first quarter of 2021.

central bank

And the Governor of the Central Bank, Marouane Abbasi, had previously warned in a message on the occasion of the issuance of the bank’s annual report for the year 2020 of the risks of the sovereign rating agencies “Moody’s and Fitch” reducing Tunisia’s number to “C”;

This impedes the trend towards international financial markets to mobilize the necessary financial resources.

The former Minister of Finance concluded that Tunisia is now between two things, the best of which is either the trend towards direct cash financing of the state treasury;

This means that the inflation rate will rise, or the central bank will refrain from that and adopt a restrictive policy to control inflation, and this may lead the country into an undeclared bankruptcy.

However, Mohsen Hassan said that expediting the development of a clear political road map and the announcement of an economic guiding document that includes the various procedures that will be included in the Finance Law and the expected reforms;

This would ease the impact of the crisis, as well as activate economic diplomacy.

The head of the Tunisian-African Business Council, Anis Jaziri, called on the central bank to try to intervene in order to postpone the date of the new rating for Tunisia by Moody's, and leave the space for the new government for at least a month or two, which did not happen.

Central Bank Governor Marwan Al-Abbasi warned of the risks of downgrading sovereign rating agencies (Reuters)

negative rating

Jaziri stated - in a media statement - that Tunisia's negative rating by Moody's and its descent to the "C" level is a major blow to the national economy, as economic actors in Tunisia will not be allowed to borrow from foreign banks, which means the bankruptcy of tens of thousands of institutions.

And economics professor Aram Belhaj said - in a statement to Al Jazeera Net - that the biggest challenge facing Prime Minister Najla Boden is mobilizing financial resources to close the 2021 budget, and preparing for the draft budget law for the year 2022.

Belhaj called for the need to develop a clear road map that defines a strategy for exiting from the exceptional situation, as well as a serious economic rescue program and a road map that sets priorities related to the supplementary finance law and the finance law for the coming year.

He pointed out that activating economic diplomacy by the President of the Republic, and going towards brotherly and friendly countries in order to mobilize financial resources, remains one of the solutions offered, despite its political cost, as a result of conditional support for some countries.