Economist Ridha Chakandali provided insights with Tunisie Numérique on the International Monetary Fund’s (IMF) forecasts regarding Tunisia’s inflation rate potentially attaining 10% in 2024. He interpreted the IMF’s statement as a reaction to the Tunisian government’s inclination towards borrowing directly from the Central Bank. He stressed that the IMF views direct state borrowing from the Central Bank as a highly delicate matter, presumably to result in inflationary pressures. Therefore, the IMF anticipates that inflation could escalate, possibly surpassing the previously recorded rate of 7.8% to reach up to 10%.
He additionally elaborated that such an inflationary outcome could arise if the Tunisian state’s borrowing from the Central Bank is channelled towards funding consumption rather than development. He pointed out that a substantial portion of the 7 trillion Tunisian dinar loan has been assigned to cover wage bills and subsidies, which could drive inflation. Likewise, employing the loan to service external debt could worsen the Tunisian dinar’s value, adversely impacting financial inflation.
However, our speaker remarked on a potential positive scenario if the Finance Minister’s plans are accomplished precisely, with only a small fraction of the funds used for foreign debt payments and the majority allocated for development expenditures. In such a case, the Tunisian economy could see beneficial outcomes, opposing the IMF’s inflationary forecasts.
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