(Ecofin Agency) - The government has repaid Tunisia's debts due in 2023, relying on new domestic loans. However, it struggles to secure external financing in the absence of a definitive agreement with the IMF on a $1.9 billion aid program.

Tunisia's debt service is expected to increase by 40% in 2024 compared to 2023, reaching $4 billion amid a drying up of external funding, the Ministry of Finance revealed in a January 22 statement.

According to the paper, Tunisia "successfully repaid all its domestic and external debts in 2023, despite significant pressure on public finances", dispelling doubts about the possibility of default. Indeed, local economists point out that the government has relied heavily on new domestic borrowing to repay debts that matured last year, thus considerably reducing liquidity and limiting bank financing of the economy. The country struggles to mobilize external financing in the absence of a definitive agreement with the International Monetary Fund (IMF) on a $1.9 billion aid program. The North African country had signed a preliminary agreement with the IMF on this aid program in October 2022 before suspending negotiations with the institution.

In April 2023, Tunisian President Kais Saied rejected the IMF's "dictate" that links the disbursement of funds to economic reforms, including ending subsidies on basic goods, reducing the public sector wage bill, and privatizing state-owned enterprises. He argued that such reforms could "lead to further impoverishment" and "trigger bloody riots similar to those sparked in 1984 by the increase in the price of bread."