At the Sidi Bahri market in Tunis, shoppers were pleased with the president’s attacks on corruption and high prices since he seized control of the government last month in moves his foes called a coup.
President Kais Saied has criticized Tunisia’s economic policy, urged traders to charge less for food and medicine and accused unnamed businessmen of stealing billions of dollars while police are investigating corruption in state industry.
“The citizen feels reassured and prices have gone down in everything,” said Azza Belwaer, a 36-year-old medical equipment vendor buying groceries in Sidi Bahri, Reuters reported.
However, three weeks after Saied sacked the prime minister and froze parliament, he has yet to appoint a new government, articulate any broad economic policy or say how he intends to finance the public deficit and debt repayments.
His intervention has paused much-delayed talks with the International Monetary Fund (IMF) for a loan program that was expected to unlock further economic assistance and avert a crisis in public finances.
Tunisia paid back more than $1 billion in debt this summer from foreign currency reserves, but must find about $5 billion more to finance its projected budget deficit and more loan repayments.
The economy shrank 8.2% last year while a deficit of 11.5% drove public debt to 87% of gross domestic product according to the IMF. Both the powerful labor union and foreign lenders see little choice but to resume the IMF process.
“We support negotiations with the IMF... we have no options,” said Mohamed Ali Boughdiri, deputy head of the UGTT union.
“The clock is ticking on the economic challenge,” said a Western diplomat, adding the reforms needed to secure an IMF loan would be important in gaining more assistance.
Such reforms - including redirecting subsidies and shrinking one of the world’s heaviest public sector wage burdens - are unpopular and would come at a moment when the public mood is highly volatile.
Anger at economic stagnation, aggravated by the pandemic, helped drive apparently widespread popular support for Saied’s sudden intervention on July 25.
Successive governments have failed to resolve the problems, often pulled between the demands of foreign lenders and the UGTT.
