Tunisia wishes to achieve IMF agreement by the end of October

• Tunisia is struggling to resurrect its public finances as discontent grows over nearly 9% inflation and a shortage of many food items in stores.
• A wage agreement reached with unions was seen as a key step toward obtaining IMF support.
• The IMF has indicated it will not proceed with a bailout unless the government includes the UGTT.

Tunisia hopes to reach an agreement with the International Monetary Fund by the end of October, according to a government spokesperson, after a wage agreement reached with unions was seen as a key step toward obtaining IMF support.

On Thursday, the government and the powerful UGTT union agreed to raise public sector wages by 5%, potentially easing social tensions. They did not, however, announce any additional agreement on reforms required for an IMF bailout.

“The Tunisian negotiating team was in contact yesterday with (the) IMF regarding the last terms of the agreement with the Fund,” Nasreddine Nsibi, the government spokesperson, said.

“We seek to reach a deal with the IMF before the end of October, which would make Tunisia able to fulfil all its commitments, including providing foods and energy products, paying wages and debt service,” he added.

According to Fitch Ratings, Tunisia’s wage agreement increases the likelihood of an IMF deal.

Tunisian officials have stated that a $3 billion loan is their goal.

The IMF has indicated that it will not proceed with a bailout sought by Tunis unless the government includes the UGTT, which claims to have over a million members and has previously shut down the economy in strikes.

Tunisia is struggling to resurrect its public finances as discontent grows over nearly 9% inflation and a shortage of many food items in stores due to the country’s inability to pay for some imports.

The IMF and other major foreign donors want Tunisia to proceed with subsidy cuts and restructuring of state-owned enterprises, as well as steps to reduce the public sector wage bill.

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