Tunisia raised the minimum wage for industrial and farm workers and pensions for thousands of private-sector retirees by 6.5% in a move to defuse discontent over economic hardships.
Thousands protested on Monday in Sidi Bouzid against marginalisation and deteriorating economic conditions. Hundreds of disgruntled young people rallied in Kef on Tuesday, demanding jobs.
A government statement said Prime Minister Youssef Chahed approved a rise in the monthly minimum wage for industrial and agricultural workers of 6.5% to 403 dinars (£102).
A similar rise in pensions for 700,000 retirees in the private sector was also approved.
Hundreds of retirees demonstrated in front of parliament this week demanding higher pensions to counter rising inflation and declining purchasing powers.
Chabad’s decision came in the face of pressure from Tunisia’s foreign creditors for a freeze in wages in the public sector, including industrial workers, to reduce its large budget deficit.
The North African country is hailed as the Arab Spring’s only democratic success story because protests toppled autocrat Zine El Abidine Ben Ali in 2011 without triggering violent upheaval, as happened in Libya, Egypt and Syria.
Since then, nine cabinets have failed to resolve Tunisia’s economic woes including high inflation and unemployment and impatience over its slowness in carrying out reforms is rising among lenders such as the IMF.
The IMF pushed Tunisia to freeze public sector wages – the bill for which doubled to about 16 billion dinars ($5.5 billion) in 2018 from 7.6 billion in 2010 – to reduce them from 15.5% of GDP now to 12.5% in 2020.
They also want Tunis to trim spending to reduce its heavy budget deficit, though such steps risk adding fuel to public anger over joblessness and poverty.