ANALYSISTunisian Political Chaos Threatens IMF Deal

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Power struggle between president, PM, parliament

Pandemic sends national debt to 91 of GDP

Central bank warns of Venezuelan scenario

TUNIS, May 27 Reuters Tunisian politicians and officials warn of an economic collapse if the government cannot agree a new International Monetary Fund IMF loan this summer, but political paralysis could scotch that effort.

Tunisians are used to lastditch financial talks that pit the demands of foreign lenders against public opinion, but this time a power struggle between the president, prime minister and parliament has added new complications.

The political situation is blocked in Tunisia, said former prime minister Youssef Chahed. In an interview with Reuters, he said there is no serious debate in the political class about fixing the economy.

After the COVID19 pandemic cut output by 8.8 last year and sent the national debt to 91 of gross domestic product GDP, the stakes are high and urgent.

Central Bank Governor Marouan Abassi told parliament last week that if the government tried to use the bank to finance the deficit instead of agreeing an IMF deal, inflation would hit three digits in a Venezuelan scenario.

Former finance minister Hakim Hamouda told Reuters the crisis threatens to bankrupt the state and former reform minister Taoufik Rajhi, who negotiated an earlier IMF loan for Tunisia, called the talks a last chance to avoid imminent collapse.

Both warned that Tunisia could face the fate of Lebanon, where the currency has…

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