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Tunisia: budget deficit may reach 9.3% of GDP in 2022

Tunisia’s budget deficit may reach 9.3% of GDP in 2022 against 7.4% in 2021, According to the Tunisian Economic Monitor, published by the World Bank Wednesday.

Similarly, the primary deficit could also reach very high levels, i.e. 6.2% of GDP in 2022 against 4.6% in 2021. “The increase in subsidies would result in pressure on the budget insofar as other expenses, and particularly the wage bill, are incompressible,” explains the WB.

The wage bill will thus increase by 7% to reach 14.9% of GDP at the end of this year, against 15.4% in 2021. “The adjustment to the 2019 level (13.7% of GDP) will not be possible this year,” says the WB.

It added the compression of nominal wage growth is difficult to achieve given the level of inflation, which is higher than expected. At the same time, the number of civil servants will remain more or less stable.

The early retirement plan decided by the government may result in the departure of 25,000 civil servants (3.8% of the civil service). This reduction will be largely offset by the recruitment of 19,000 new civil servants (mainly the result of regularization), more than half of which will benefit the Ministries of Defense and Interior,” says the WB’s Economic Monitor.

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