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After salary rises, IMF delays loan for Tunisia

February 26, 2019 at 9:32 am

International Monetary Fund (IMF) [World Bank Photo Collection/Flickr]

Tunisian Central Bank Governor Marwan Abbasi said yesterday that the IMF has postponed its experts’ visit, as part of the fifth review, for an unspecified period following an agreement between the government and the Tunisian General Labour Union on the increase of salaries of government workers.

Abbasi stressed that the IMF experts were scheduled to visit Tunisia for the fifth review to grant the country a new loan, however the decision to raise the salaries has delayed the visit. He explained that the Central Bank did not receive any notification from the IMF about the date of the experts’ next visit.

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According to the governor, the IMF has been monitoring the situation in Tunisia following the salary increases. The international financial body had warned Tunis of the possibility of suspending the economic support plan if the government does not abide by the agreed upon reform programme.

Abbasi added that all foreign funding included in this year’s budget depends on receiving the IMF’s loan, stressing that the Fund’s approval “will enable us to convince the rest of the lenders to grant Tunisia the needed foreign funding for the 2019 budget estimated at 10 billion Tunisian dinars, about $3.3 billion.”

The IMF was expected to approve a loan tranche of $225 million for Tunisia at the end of the month however the government decision to raise civil servant salaries, a result of mass protests held across the country has meant Tunis is not abiding by the financial body’s terms for the loan.