Summary:

The International Monetary Fund (IMF) has delayed the approval of Tunisia’s $1.9 billion loan deal due to the government failing to present a final 2023 finance law. The IMF Executive Board meeting scheduled for 19 December was removed from the publicly available schedule of activities. A previous version of the finance law was leaked, causing concerns about the potential reforms that the government will undertake to meet its obligations to the IMF.

Outlook:  

The long-expected finance law will likely make few in Tunisia happy. The main labor unions have purposefully distanced themselves from whatever reforms emerge when the law is released, implicitly absolving themselves of responsibility for any painful steps required to adhere to the requirements of lenders. Delay of the IMF loan finalization process raises the risk that the process simply won’t be completed with such stark discord among key Tunisian actors. While this is unlikely, the delay creates additional space for those who are against substantial reform to organize and strengthen their opposition and may further jeopardize economic stability.