Tunisia to start food and energy subsidy cuts next year

Tunisia will begin gradual cuts in energy and food subsidies coupled with financial transfers to vulnerable families next year, the government said on Tuesday, announcing a key reform demanded by international lenders.

Tunisia is in talks with the International Monetary Fund to agree on a $4 billion loan in return for an unpopular reform package to shore up its struggling public finances.

Cutting subsidies certainly is the way forward to breaking the oligarcho-monopolies BUT, for over a year now Tunisia has been in talks with the IMF, the second way forward is major legislative change of a level economic sophistication that requires expert economists & lawmakers. https://t.co/iDLGTr80Hp

— Elizia Volkmann (@EliziaVolkmann) June 7, 2022

Energy Minister Naila Nouira told a news conference that, starting next year prices of gas for households will go up. Domestic fuel prices are set to keep rising until they reach market levels in three years, she said.

Budget spending on subsidies rose to more than 5 billion Tunisian dinars ($1.64 billion) from 3 billion dinars last year , Trade Minister Fadhila Rahbi said.

The government also aims to reduce the public wages bill by freezing the increases in public sector, a step rejected by powerful UGTT Union, which announced a national strike in state firms on June 16 to protest against the government’s economic policy.