The Tunisian government withdraws a “prohibitively expensive” supplementary budget

The Tunisian government withdraws a “prohibitively expensive” supplementary budget
The Tunisian government withdraws a “prohibitively expensive” supplementary budget

The Tunisian government withdraws a “prohibitively expensive” supplementary budget

The economic crisis deepens with the decline in tourism and phosphate exports


Tuesday – 17 Rabi Al-Awal 1442 AH – 03 November 2020 AD Issue No. [
15316]

Nearly shut down Tunisian phosphate mines deepen the country’s economic crisis (Reuters)

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Tunisia: “Asharq Al-Awsat”

The Tunisian government said, on Monday, that it had withdrawn the supplementary budget bill for 2020, which has the largest deficit in contracts, after parliament and the central bank asked it to reduce its spending plans.
The Parliament’s Finance Committee rejected last week the bill, which included plans to increase the fiscal deficit to 14 percent of GDP and increase expenditures by about $ 4 billion, which is largely due to efforts to mitigate the impact of the Coronavirus pandemic.
The government was counting on the central bank’s purchase of treasury bonds to finance this deficit. But the bank rejected the move, saying it would raise inflation, reduce reserves and put pressure on the local currency, among other risks.
The Tunisian economy is undermined by high debt and deteriorating public services, exacerbated by the pandemic, along with a year-long political turmoil.
And last week, the Tunisian Minister of Tourism, Habib Ammar, warned in a parliamentary session of the collapse of the tourism sector with an almost total stoppage in the various facilities of the country, in one of the negative consequences of the outbreak of the Corona pandemic locally and globally.
And after easing the restrictions taken after the first wave of the virus, it seems that the closures and restrictions will resume again in conjunction with the second wave of the virus that the world is currently witnessing.
The expectations of the Tunisian Ministry of Tourism indicate that the indicators for the whole of 2020 recorded a sharp decline in tourism revenues by 66%, at the level of tourist nights by 80%, and in the number of arrivals 79%.
The Minister of Tourism considered that the situation in the sector left the tourism institutions facing difficult choices, and put everyone before the duty to save it from extinction, considering that there is an “almost complete cessation of any tourism activity.”
He added, “This crisis had a direct reflection on the labor market … We lost about 50 thousand direct and indirect job opportunities in the tourism sector, which represents 13 percent of the sector’s total employment.”
The tourism sector in Tunisia provides 400,000 direct and indirect job opportunities, and about one million job opportunities related to the tourism sector, according to the minister.
Tourism contributes between 8 and 14 percent of the GDP of the Tunisian economy, and is a major source of foreign exchange, along with exports and remittances from workers abroad.
As for exports, and in an event indicative of the depth of the crisis, Tunisia decided to resort to importing phosphates to meet its internal needs for the first time last September, after it was the fifth producer of this substance in the world.
Abdel-Wahab Agroud, Director General of the Tunisian Governmental Chemical Complex, said that his country “is compelled to import in order to face the deficit in providing sufficient fertilizers for the agricultural sector and to create sufficient stocks of this substance.”
Tunisia’s annual production rate of phosphates during the period between 2011 and 2019 did not exceed 3.5 million tons annually, compared to the production of 8.3 million tons in 2010; Tunisia’s phosphate reserves amount to 7 billion tons.

Economy

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