Summary:

From 10 – 16 April 2023, the World Bank and the International Monetary Fund (IMF) held their 2023 Spring Meetings in Washington, DC, an event at which Tunisia was represented by the Minister of Economy and Planning and the Central Bank Governor. While Tunisia has no scheduled speeches at the event, the delegation appears to have been dispatched to press for progress on a loan deal to rescue the faltering economy.

Recent statements by President Kais Saied indicated a growing skepticism toward a $1.9 billion IMF loan deal that has been in discussion for months, though is currently suspended. His comments raised questions about the future of the deal and Tunisia’s commitment to implementing the reforms that would make it possible. However, government-sanctioned news  indicated that Tunisia’s objective at the Spring Meetings was to revive the IMF deal.

During a press conference on the sidelines of the Spring Meetings, the IMF clarified that no requests had been received from Tunisia to revise the loan deal that was agreed upon in September 2022. The IMF affirmed the demonstrated commitment of Tunisia’s civil servants to constructing the deal and denied that the IMF is imposing “diktats” on Tunisia, as was asserted by President Saied.

Meanwhile, Italy has more openly pressed for the IMF to begin releasing funds to Tunisia prior to progress on reforms, citing the risks of a worsening economic crisis. Italy has been increasingly vocal about the irregular migration crisis and the importance of Tunisia’s economic stability to managing the flow of migrants to Europe.

Outlook:  

With divergent views on the IMF loan deal emerging from the Tunisian government, the future of deal remains in question. The machinery of the Tunisian government continues to indicate that the deal is delayed, but being pursued. However, skeptical statements and general inaction by the President point to the deal’s possible demise.

The Spring Meetings are a key juncture for senior Tunisian officials to work behind the scenes to raise and address concerns with potential creditors. The fact that Tunisia’s delegation is present and state media has indicated plans to revive the deal makes it likely that progress is made on the deal.

Growing pressure from Italy to press ahead with the deal may be contributing to renewed momentum. We will be watching if that pressure leads to agreements to defer reform progress in exchange for rapid release of funds, with the hopes of preventing economic collapse.

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