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Tunisia, Saudi Arabia sign $500m loan deal

July 21, 2023 at 4:48 pm

Saudi Arabian Crown Prince Mohammed bin Salman (R) greets Kais Saied (L), President of Tunisia in Jeddah, Saudi Arabia. [Royal Court of Saudi Arabia – Anadolu Agency ]

The governments of Tunisia and Saudi Arabia signed a soft loan agreement worth $400 million and a financial grant of $100 million offered by Riyadh to help mitigate Tunis’ budget deficit.

This came at a time when Tunisia is facing a budget deficit crisis and a decline in foreign investments.

The Tunisian radio reported that Finance Minister Siham Boughdiri Nemsia and Saudi Finance Minister Muhammad Al-Jadaan signed a $400 million soft loan agreement at the Tunisian government palace in Kasbah. They also signed a $100 million grant agreement.

The Tunisian minister stated that the loan and grant agreements will be directed to support the state’s general budget.

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According to the Tunisian Budget 2023, the state is expected to record a deficit of 7.5 billion dinars ($2.5 billion).

The Saudi Press Agency (SPA) cited the Minister of Finance as saying that the signing of the two agreements is an affirmation of the depth and strength of relations between the leaderships of the two countries, and a continuation of the kingdom’s efforts to support Arab and Islamic countries in terms of development and economy.

Tunisian public debt is expected to reach 125.7 billion dinars ($42 billion), which is equivalent to 77.4 per cent of the country’s GDP.

Tunisia is living in a severe economic crisis, which was exacerbated by the repercussions of the outbreak of the COVID pandemic, the high cost of importing energy and basic materials following the Russian-Ukrainian war, and the increase in irregular migration rates.

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