Debt ratio exceeds alarming level in Tunisia

Source: Xinhua| 2017-07-28 11:02:22|Editor: Zhang Dongmiao
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TUNIS, July 27 (Xinhua) -- Tunisia's debt ratio currently exceeds 75 percent, raising the specter of a serious financial crisis, a key minister said on Thursday.

Fadhel Abdelkafi, minister of finance, development, investment and international cooperation, warned a serious public financial crisis has begun in his country.

He voiced his concern during a hearing at the Assembly of the Representatives of the People, Tunisia's legislature, for the approval of a planned 500-million-euro loan from the European Union (EU).

The loan agreement was signed in April as part of a Memorandum of Understanding between the EU and Tunisia in Brussels.

"This loan constitutes a direct contribution to the Tunisian state budget in order to fill a flagrant deficit on the payroll which currently amounts to 15 billion dinars (6.72 billion U.S. dollars), " said Abdelkafi.

According to Abdelkafi, the financial situation of Tunisia remains increasingly alarming given a possible inability to pay public service wages for the next two months -- August and September.

"The Tunisian state budget has increased from 18.6 billion dinars (8.332 billion dollars) in 2010 to 34.5 billion dinars (15.455 billion dollars)," the minister said.

The EU loan to Tunisia will be released in three tranches. The first, 200 million euros (234 million dollars), will be released in the second half of 2017, while the second and third tranches, 150 million euros (175 million dollars) each, will be released in the first half of next year.

As for the repayment of this loan, the Tunisian government enjoys a "weighted average maturity" of 15 years with an interest rate of 1.5 percent.