"Debt is not a choice" (FinMin) | Tunisia News Gazette

“Debt is not a choice” (FinMin)

Finance Minister Mohamed Ridha Chalghoum said Wednesday that “indebtedness is not a choice but the result of cumulative policies that cannot be solved, at once, through a political or administrative decision”.

Responding to MPs’ questions at a plenary session devoted to the adoption of a law approving the retrocession to the State of the February 17, 2017 bond issue by the Central Bank of Tunisia (BCT) on the international financial market to mobilise a sum of Euros 850 million (nearly 2,060 million dinars), he added that “the resolution of the debt problem must be done in the framework of a national consensus process.

He noted that “the country’s reliance on indebtedness is essentially aimed at financing the state budget and supporting the national economy “.

The Minister also stressed the need to reduce the wage bill, which he called heavy, referring to the legislative initiative on the incentive to voluntarily departure of state employees in order to lighten the weight of payroll in the years to come.

He also deemed necessary to master the state’s intervention in the framework of the compensation system, by directing subsidies to those who need them.

He also considered that the compensation of hydrocarbons is another burden for the State, recalling that a sum of 1,500 million dinars was dedicated to it in 2018 to resolve this problem and to agree on the choice of additional debt to cover the gap in rising hydrocarbon prices or share the cost increase with the consumers.

Chalghoum also indicated that a large part of the State’s expenditure is intended to repay debts, estimated for 2018, at about 7,972 million dinars.

He noted the government’s effort to reduce debt through the 2018 Finance Act and the adoption of a future vision likely to help reduce the budget deficit to 4.9% against 6.1% in 2017, the latter not to exceed 3% by 2020.

The Minister emphasised the need to attract foreign investment, to increase exports and to promote the tourism product in order to reduce external indebtedness and therefore to obtain the necessary foreign exchange resources, given the decline in the country’s foreign exchange reserves to 84 days of imports, a figure that could further fall to 79 days in the next period, which would require resorting to additional borrowing.

Source: TAP news Agency

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