Photograph — USA Today

Tunisia has asked four of its creditor countries to delay debt repayments, Investment Minister Slim Azzabi said Monday, as the government announced more pessimistic economic and budget forecasts for 2020 in face of the coronavirus (COVID-19) pandemic.

At a news conference, Azzabi said the country is currently negotiating with Saudi Arabia, Qatar, France, and Italy to push back payments.

Before the pandemic, Tunisia’s economy was under strain as the country’s public finances became a source of concern.

In 2019, gross domestic product growth slowed to 1.5 percent following two years of rebounds while growth in the agriculture and fishing sectors slumped to 1.7 percent from 9.8 percent in 2018.

The slump was due to internal constraints such as the fragmentation of the political party system and related difficulties in reaching consensus on key economic reforms as well as conflict in neighboring Libya, according to the World Bank.

The country’s GDP was expected to recover by 2.1 percent this year and 2.6 percent in 2021, spurred on the supply side by agriculture, phosphates, and tourism sectors. But the outlook has changed in the wake of the coronavirus pandemic that has hit Tunisia’s economy. According to Azzabi, growth will shrink by 6.5 percent this year due to the complete lockdown imposed on the country.

Tunisia’s economic growth was spurred primarily by tourism, financial services, and private consumption. The tourism sector, which accounts for nearly 10 percent of GDP and is an important source of foreign currency, has been greatly affected.

Revenue in the first six months of the year fell by half from the same period of 2019 as Tunisia closed its borders and travel for Western tourists grew more expensive and complex.

Tunisia’s newly appointed government, which took office in February after months of political wrangling, has sought to reduce the deficit and bring down public debt.

Finance Minister Nizar Yaich said he expects the budget deficit to widen to about 7 percent of GDP from the 3 percent previously expected. Tunisia also hopes to arrange a new deal within four months with the International Monetary Fund.

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