In a notable financial achievement, Tunisia has successfully managed to pay off all its domestic and external debts for the year 2023, according to Finance Minister Sihem Boughdiri. This accomplishment comes in the face of substantial pressure on the country’s public finances and serves as a reassuring signal dispelling doubts about the possibility of a debt default.
Tunisia, a North African nation grappling with its ailing public finances, is preparing to face an even greater challenge in 2024. Official documents reveal that the country is slated to make payments of $4 billion in foreign debts this year, representing a significant 40% increase compared to the previous year. This surge in debt repayment arrives at a time when Tunisia is struggling to secure external financing, thereby intensifying the pressure on its economic stability.
Economists closely monitoring Tunisia’s financial landscape have observed that the nation heavily relied on acquiring new internal loans to meet its external debt obligations in 2023. This approach, while allowing Tunisia to fulfill its international commitments, had a substantial impact on reducing liquidity and consequently hampered banks’ ability to provide financing to the broader economy.
The concern now centers around the sustainability of this strategy for the year 2024. With a mounting foreign debt burden and the challenges associated with frequently resorting to internal loans, Tunisia faces a complex financial terrain. Economists foresee the coming months as particularly arduous, given the escalating foreign debt and the need to strike a balance between external and internal financing.
As Tunisia navigates these financial complexities, the government anticipates that the accumulated public debt for the year 2024 could reach approximately 140 billion dinars ($45.17 billion). This projection would represent around 79.8% of the country’s Gross Domestic Product (GDP), a notable increase from the previous debt total of 127 billion dinars.
The successful clearance of all 2023 debts has showcased Tunisia’s commitment to meeting its international financial obligations despite the hurdles it faces. However, the looming challenge of a 40% surge in foreign debt repayment for 2024 underscores the pressing need for the nation to find a sustainable and balanced approach to managing its finances.
Tunisia’s ability to navigate this financial terrain will be closely watched not only by economists but also by international stakeholders interested in the country’s economic stability. As the nation strives to strike the right balance between internal and external financing, it will need to employ prudent financial management to ensure a sustainable and resilient fiscal future.
