Exponential, there would be little more than a suitable term to describe the plummeting growth rate for the year 2015. From 3% at the start, it tumbled steadily to 0.5%, as announced by Finance Minister Slim Chaker at a press conference held on Thursday to present the draft supplementary budget law of 2015, adopted the day before yesterday by the Cabinet meeting. Could this be the last and final forecast for this Annus Horribilis? It may be expected, but the way the economic situation is worsening, it would not be surprising that the zero sum be “within reach.”
This revision of the growth rate has necessarily a cost. The minister has put it to about 461 million dinars, adding that the fight against terrorism to Tunisia alone cost the loss of two points of growth and about 40,000 jobs. Moreover, the supplementary budget bill for 2015 has allocated a further 306 million dinars (MTD) in favor of the Ministries of Defense and Interior and the Customs, naturally at the expense of development expenditure of which 20% is are dedicated to the acquisition of weapons and equipment to fight against terrorism.
Slim Chaker stressed that Tunisia is experiencing a transition, which he described as “dangerous” as it migrates from the investment in human resources, development and employment, to the provision of additional funding for weapons, to fight against terrorism.
This struggle involves mainly combating poverty, strengthening culture, paying more attention to low and middle income social groups and establishing mechanisms to enhance the employability and project creation.
He reminded, in this regard, that the supplementary budget bill contains a series of exceptional measures to allocate credits valued at 660 million dinars for the next three years in order to boost the economic activity and especially help small and medium enterprises (SMEs).
An amount of 60 million dinars will be, in this context, dedicated to unemployed youth, especially in inland areas, while 240 million dinars will be made available to governors to help SMEs to protect their jobs, besides an amount of 260 million dinars dedicated to the recapitalization of SMEs.
Decrease in fuel prices deferred until cows come home!
Contrary to what was reported in the media, there will be no decrease in fuel prices in 2015. The Minister of Finance could not be clearer. In doing so, motorists and households will forget the 50-millime cut for the price of a liter of petrol and the 30-millime decrease for a liter of diesel.
He explained that the government has tackled this issue from an economic point of view away from political calculations, however, adding that the ministries of finance, commerce and industry are currently working on the establishment of a mechanism to automatically lower and increase fuel prices in Tunisia, according to its fluctuating prices on the world market.
This mechanism could be put in place from 2016, he said, adding that the decision could not be unilateral and would be discussed with the different political parties, national organizations and components of civil society to reach consensus on this subject.
The minister also stressed that the draft supplementary budget law did not include a reduction in the budget for subsidies but rather an increase with a value of 30 million dinars to reach 1.53 billion dinars in 2015.
A few bright spots, anyway!
The picture Slim Chaker has drawn of the economic situation is not totally black. For example, the government has revised down state expenses which were cut from 29 billion dinars to 27.9 billion dinars, i.e. down 1.1 billion dinars, which helped reduce the budget deficit to 4.8% from 4.9%.
And then, the rate of indebtedness was reduced to 51.9% against 52.9% currently.
Moreover, the supplementary budget bill for the fiscal year 2015 foresees a reduction by 1.906 billion dinars in terms of debt to 45.4 billion dinars from the 47.306 billion dinars mentioned in the Finance Act for 2015.