“The Government is compelled to increase, if only slightly, oil prices as part
of the supplementary draft finance law for 2012″ said Finance Minister Houcine Dimassi.
“Yet, the amount of the price increase has not been determined yet,” he also said.
The minister, who was speaking, Wednesday, at the periodic press meeting at El Kasbah, said this decision was dictated by fluctuations in oil prices on the global market (the price per barrel is currently at 125 dollars).
He said that the State currently spends nearly 2 billion dinars (an amount able to create 100,000 permanent jobs), under spending for oil subsidies, saying that a one-dollar increase in the price of oil barrel (on the basis of 100 dollars) causes additional spending of 28 million dinars to the State.
Mr. Dimassi did not rule out the possibility of resorting to a national loan as one of the sources of domestic funding.
The minister, who was reviewing the outline of the supplementary draft finance law for 2012, said this bill was developed in “difficult” and “special” conditions as a result of internal and external pressures.
External pressures involve essentially the slowdown of growth in Europe, first economic partner of Tunisia, he said, adding that projections indicate a negative growth of 0.5% in the Euro Zone in 2012.
He also pointed to the volatile situation in Libya and in Gulf countries, mentioning, in particular, the crisis in Iran and its fallout on changes in oil prices.
Mr. Dimassi said the supplementary draft finance law has taken into account the decline in economic growth in Tunisia which has impacted negatively on the country’s financial balances, the gradual increase in oil prices and the country’s ability to meet its financial commitments in 2012.
The minister said, however, that signs of economic revival were recorded early 2012, pointing, in this regard, to the 18% increase in the investment intentions in the first two months of this year compared to the same period in 2011, the rise of textile and mechanical and electrical industries’ exports and the increase in the number of tourists.
Balance between needs of marginalized classes and regions and State resources
Mr. Dimassi said the supplementary draft finance law seeks to strike a balance between the financial, economic, social and political areas without creating tensions in the country.
It aims to meet the needs of vulnerable classes and regions, by taking into account factors of revival of the national economy without an exaggerated resort to foreign debt which requires a strong mobilization of domestic own resources.
Hence, public expenditure was set at 25.4 billion dinars in the supplementary draft finance law, i.e. up nearly 2.5 billion dinars, compared with the initial finance law of 2012, said the minister.
He added that additional resources will come essentially from selling part of the seized property (lands, buildings, companies and titles…), the use of part of the reserves (900 million dinars) which are still held by the State and coming from the privatization
of part of the capital of “Tunisie Telecom” in 2006, in addition to the improvement of the performance of taxation.
The minister also pointed to the possibility of identifying other financial sources, coming from the settlement of the litigious situation of businessmen (460), through tax reconciliation and by integrating them in the economic circle.
Management and development expenditures
Mr. Houcine Dimassi said the complementary expenditures of the draft finance law (2.5 billion dinars) will be equally divided between management and development spending.
He said that development expenditures will be dedicated to investment projects, employment and social housing to be carried out by the State.
The deficit will be at around 6.6% in 2012 and the debt rate at 46%, which is a tolerable rate compared with the international average which is 60%, he said.
Tunisia’s growth rate would reach 3.5% in 2012, according to the Finance Minister.
The achievement of this growth rate depends on the restoration, as soon as possible, of stability and security across the country.