Tunisia’s budget deficit is likely to widen to at least 6% of GDP next year and the government aims to prevent it widening further to protect its investment grade credit rating, Reuters reported quoting the country’s finance minister as saying on Thursday.
“This year we are going to end up with a budget deficit of 4% (of GDP), next year we will be very lucky if we end up with 6%,” Jalloul Ayed told a conference.
“We don’t want the budget deficit to increase to 8-9-10% because if that were to be the case, Tunisia could lose its investment grade, we don’t want that.”
Tunisia has the lowest investment grade rating and is on negative outlook with all three major ratings agencies.
Moderate Islamist party Ennahdha in October won Tunisia’s first election since its revolution in January and is leading a coalition government.
The party’s leaders have promised to pursue liberal, business-friendly economic policies. Tunisia’s economy grew by 1.5 percent in the third quarter but overall growth in 2011 will be close to zero, central bank governor Mustapha Kamel Nabli said last month.
Tunisia’s draft budget, presented to the cabinet in November, forecasts the economy to bounce back from this year’s slump and grow 4.5% in 2012. The North African country’s GDP grew 3.7% in 2010.
