The “Capital Economics”, an economic research company, expected Tunisia's debt-to-GDP ratio to rise to 105 percent by 2025, which increases the likelihood of debt restructuring in the coming years.
The Tunisian tourism sector is facing the challenges of the Coronavirus, and is in a critical situation amid an economic crisis that has been deepened by the pandemic, which has prompted the government to drain its public finances to keep the wheel of the economy spinning. While the restrictions taken by the government to limit the spread of the pandemic, had dire consequences for the tourism sector, and as a result, the Tunisian economy shrank by 8.8 percent last year, to record the largest economic contraction in the world.
The budget deficit widened from an average of 5 percent over the past decade to about 12 percent of GDP in 2020. The debt of state-owned companies exceeded 40 percent of GDP, and the public debt rose from 72 percent of GDP in 2019, to about 90 percent now due to the pandemic, while the debt composition is a source of concern, as most of it is denominated in foreign currency.
Source (Al-Arabiya.net, Edited)
