Tunisia premier says virus-hit economy to contract 6% in 2020

TOURISM PLUNGE. Tunisians spend time at the beach in La Marsa, on the outskirts of the capital Tunis on May 16, 2020, amid the COVID-19 pandemic. Photo by Fethi Belaid/AFP

TUNIS, Tunisia – Tunisian Prime Minister Elyes Fakhfakh warned on Thursday, June 25, that his country's economy, hit hard by the coronavirus pandemic, would contract by around 6% this year, as public companies flounder.

"All state enterprises are in bankruptcy," he declared in a speech to parliament. "The next battle is to save the state."

Gross domestic product (GDP) was on course to contract by 6% this year, he announced, noting also that in recent discussions with the International Monetary Fund (IMF) and World Bank, these institutions have begun working on the basis of a 6.8% contraction this year.

These figures mark a deeper recession this year than the last official forecast of -4.3% made by the IMF.

Fakhfakh said that key sectors, notably tourism and textiles, would be hit hard, resulting in around 130,000 jobs being lost, while public debt would hit the "terrifying level" of 92 billion dinars ($33.5 billion, around 30 billion euros).

He said GDP this year would fare worse "even than during the 2011 revolution" that toppled dictator Zine el Abidine Ben Ali, when the economy contracted by 1.9% year-on-year, according to World Bank data. – Rappler.com