Various economists are unanimously agreed that Tunisia is living in a difficult economic and financial situation, as it is required to pay 16.3 billion dinars of loans during 2021, while only two-thirds of the amount will be provided, and one-third remains according to the 2021 budget, while the exempted Mechichi government did not put a supplementary financial law on the evening of July 25, Since March, it takes into account economic changes so that the state can mobilize new resources worth 18.7 billion.
This impasse prompted the Central Bank to print banknotes to fill the gaps and pay the employees’ wages. Any repercussions of this procedure?
In this regard, the economic expert, Ezzedine Saidan, explained to “JDD Tunisie”, today, Friday, August 20, 2021, that if the state is unable to provide resources while it has large expenditures, it resorts to borrowing, but in the current situation the country is unable to borrow from the financial markets. For several reasons, I asked the central bank to provide it.
Saedan added that the central bank, in turn, does not have this money, so it issues a currency, and the consequences of this process will be dire on the financial balances and lead to a dangerous inflation situation, noting that the provision of employee wages will be possible with this procedure, but at what value for the Tunisian dinar? According to him.
He said that Tunisia went to extreme solutions that harm all balances, because the authority did not intervene in time during April and May of last year, and it bore all the consequences, including the closure of 70,000 economic institutions, the rise in unemployment rates to 18% and a significant decline in the growth rate in addition to inflation.
He explained that, on July 23 and August 5, Tunisia was forced to repay two loans by issuing short-term treasury bonds, and on the same day the Central Bank printed the currency, which is not a physical printing, and means pumping money to banks and issuing currency without an economic return.
He indicated that these two loans were guaranteed by the United States of America, so it was necessary to repay them, because any default would have dire consequences and it would be inevitable for Tunisia to go to the Paris Club.
Rifi_JDD
