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Tunisia fears repercussions of price increases

January 5, 2018 at 9:15 am

Tunisian President Beji Caid Essebsi speaks at a press conference in Tunis, Tunisia on 27 December 2017 [Yassine Gaidi/Anadolu Agency]

The President of Tunisia has stressed the need to take the necessary measures to preserve citizens’ purchasing power, strengthen efforts to combat corruption and eliminate monopolies so as to allow greater control over prices, Quds Press has reported. Smuggling will also be targeted, explained Beji Caid Essebsi.

President Essebsi made his comments during a meeting on Thursday at the Carthage Palace in Tunis with Prime Minister Youssef Chahed. Together they reviewed the measures that have been approved by the Supreme Council for Export which aim to increase exports and reduce the trade deficit.

Tunisia is facing an increase in the prices of a number of basic goods, with the latest budget including many difficult economic measures. The decision to raise prices came after the implementation of the 2018 Finance Law, which was ratified by the Tunisian parliament late last year.

However, the General Labour Union warned of the negative repercussions of the measures taken by the government, including the increase in the prices of many items required for daily consumption. The Union condemned the price rises but pointed out that they are the inevitable result of the rise in Value-added Tax in the 2018 budget which it not only opposed, but also argued is the easy way out for a government seeking to cover the public deficit at the expense of consumers and wage earners.

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Pointing out that any increase in prices before the revision of the subsidy system would widen the social gap, the Union said that it would also reduce consumption opportunities which are one of the most important engines for growth in Tunisia given the general lack of investment. The increase in the prices of many materials was contrived and based on tricking consumers, it added, citing the price of sugar as an example, as well as holding back fresh goods at checkouts and offering canned goods instead.

The Union also stressed that the government should respect its commitment not to increase the prices of basic materials in accordance with the agreement reached with the representative body on this matter.

“There should be a reconsideration of the subsidy system to ensure that it is there for those who need it,” concluded the Union statement. “Furthermore, the market should be restructured to fight against monopolies, resist speculation and smuggling, reorganise distribution paths and ensure state intervention when necessary.”