Tunisia’s parliament rejected a government plan to issue up to $800 million in bonds this year, a blow to government seeking to secure funding to cover the country’s fiscal budget deficit.
The parliamentary finance committee heard Finance Minister Ridha Chalgoum announce plans to issue bonds worth up to $800 million this year, but refused to approve the issuance.
“There is possibility to exit to financial market by the end of the year if we need, and any possible deal will be according to opportunities in the markets”, Chalgoum said.
Tunisia in October sold a five year Eurobond worth 500 million euros with an interest rate of 6.75%.
Government needs to obtain approval to issue bonds on the global financial market. Tunisia needs around $2.5 billion in external financing in 2019, officials said.
The North African country aims to cut its deficit budget from about five percent of GDP in 2018 to 3.9% in 2019.
Total debt, which hit record levels to reach about 74% of GDP by the end of 2018, is a concern for Tunisians, especially the political opposition, which accuses government of seeking easy solutions by borrowing.
Prime Minister Youssef Chahed said earlier this year painful reforms must be launched to stop the bleeding of debt, but reform plans face strong resistance from the country’s labour unions.