Summary:

In mid-October, the 2024 finance law, which functions as Tunisia’s national budget was circulated. The budget offers no indication that the country plans to undertake some of the key reforms called for by international lenders, including the International Monetary Fund (IMF). 

The 2024 budget proposes $24.51 billion in spending, which Tunisia plans to raise through taxes and credit. 

Unlike the 2023 finance law, which was drafted based on the assumption that Tunisia would be receiving $1.9 billion from the IMF, the 2024 finance law does not include plans to receive IMF funding. 

The 2024 budget includes few adjustments to the key problem areas within the economy, namely: subsidies and the public wage bill. The budget also includes ambitious prospects for growth, forecasting 2.1% growth despite .9% growth in 2023. 

The 2024 budget includes plan seeks to offset shortfalls by increasing taxes on financial institutions with a “temporary” increase of 4%. This tax will raise the tax rate on banks and other companies to 40%. 

Outlook:  

President Kais Saied has insisted that Tunisia will depend on itself to revive its economy, however, many economic experts and commentators view this as a difficult proposition. 

The budget depends on raising taxes on institutions from which the state has already borrowed significantly and seeking credit, which has become scarce as the country refused to pursue substantive economic reform. 

The 2024 budget is a signal that the IMF deal may be further from implementation than ever and raises concerns about Tunisia’s economic vulnerability moving into 2024. 

With significant credit outstanding and additional borrowing necessary, the country remains on an unsustainable economic trajectory, particularly as the conflict between Hamas and Israel threatens to expand to a regional conflict resulting in an economic downturn. 

Explore our services or speak with our team of North Africa-based risk experts.