Last December, the IMF postponed a meeting of its board of directors regarding a loan program for Tunisia, with the aim of giving it more time to complete it.
At a press conference in Washington, where the IMF and the World Bank are holding their spring meetings, Azour stressed that “the fund did not impose any dictates.”
Tunisian President Kais Saied gave his clearest rejection yet of the terms of the stalled $1.9 billion bailout from the IMF when he said last week he would not accept “dictates” and suggested cutting subsidies could lead to unrest.
Tunisia reached a staff-level agreement with the IMF on the loan in September, and donors believe that state finances are increasingly diverging from the numbers used to calculate the deal.
“The fund did not respond to a request from the Tunisian authorities to reconsider the reform program prepared by the Tunisians,” Azour said.
The reform package includes reducing food and energy subsidies, restructuring public companies, and reducing the public sector wage bill.
Without a loan, Tunisia faces a full-blown balance-of-payments crisis. Although most of the country’s debt is internal, there are external loan payments due later in the year, and credit rating agencies have said the country could default.
Earlier in March, US Secretary of State Anthony Blinken warned of “the progress of the economy in Tunisia towards the unknown,” during a hearing of the US Senate Foreign Relations Committee.
“The most important thing they can do in Tunisia from an economic point of view is reach an agreement with the International Monetary Fund,” Blinken said. “We strongly encourage them to do so because the economy may be heading into the unknown,” he added.
Last February, Moody’s, the global credit rating agency, downgraded Tunisia’s rating to Caa2, the same grade that the agency granted to Lebanon one month before it announced defaulting on its debts in March 2020.
Moody’s said that the downgrade of the credit rating “is due to the lack of comprehensive financing so far to meet the government’s needs, which increases the risk of default,” adding that the failure to secure a new financing program by the International Monetary Fund exacerbated the difficult financing situation and increased pressure. on the country’s foreign exchange reserves.
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