Tunisian government raises public sector salaries

The Tunisian government has signed an agreement to raise the salaries of 800,000 public sector employees for the second time this year. Reuters said that the agreement was signed by Prime Minister Habib Essid and Secretary-General of the Tunisian General Labour Union (UGTT), Hussain Abbasi, on Tuesday. The salaries will increase by 50 Tunisian dinars (around $25) as from January next year.

According to one consumer advocacy organisation, the purchasing power of the Tunisian middle class has been reduced by more than 12 per cent this year due to inflation, which reached 5.6 per cent in August, as well as the high unemployment rates.

In April, the government increased the salaries of public sector employees by $47. The new rise will cost the state about 500 million dinars ($290 million).

“The economic situation of the country is very difficult,” said Prime Minister Essib, “and we have to make sacrifices to keep social tensions calm. But we have to get back to work and productivity to revive the economy.”

The Director of the International Monetary Fund, Christine Lagarde, urged Tunisia last week to accelerate economic reforms, including cuts in public spending, saying public sector pay in Tunisia accounted for about 13.5 per cent of gross domestic product, one of the highest rates in the world.

The Tunisian government faces pressure from international lenders to reduce public spending and cut the deficit to help economic growth, especially after two militant attacks badly damaged its vital tourism industry. It has been praised as an example of compromise politics and democratic transition since the overthrow of President Zine El-Abidine Ben Ali in a 2011 uprising, holding free elections and drafting a new constitution.

Many Tunisians are, however, concerned about the rising cost of living, unemployment and the continued marginalisation of rural towns.