The primary deficit could also settle at very high levels of around 6.2% of GDP in 2022, against 4.6% a year earlier, indicates the WB in its latest economic bulletin dedicated to Tunisia.
And to explain that the “increase in subsidies would translate into pressure on the budget insofar as other expenses, and particularly the wage bill, are incompressible”.
The wage bill will increase by 7% in nominal terms, to reach 14.9% of GDP in 2022 against 15.4% in 2021, specifies the same source, noting that the adjustment towards the 2019 level (13.7%) cannot be done this year. Thus, the World Bank estimates that “the compression of the growth of nominal wages is difficult to achieve given the level of inflation which is higher than expected”, adding, however, that the number of civil servants will remain more or less stable.
In addition, public investment expenditure will decrease in nominal terms and as a proportion of tax revenue (12% in 2022), observes the WB, noting that the “persistent use of investment expenditure as a factor of adjustment of the he budget balance contributes to the deterioration of public services and penalizes investment and, at the same time, growth”.
And to emphasize that the financing of the budget remains problematic given the budget deficit in a context of stable debt at fairly high levels.
The level of indebtedness will stand at 78.3% of GDP in 2022 against 82.4 for, without considering the debt of public enterprises, specifies the bulletin, noting that the growing evolution of the debt stock and the increase in the policy rate determines the growth of interest on the debt.
“The continuous deterioration of the sovereign rating on the one hand and the slow progress of discussions for a new program with the IMF have limited access to budget financing, mainly to debt on the local financial market, which is moreover quite narrow”, concludes the WB.