Tunisia gains economic breathing room with boost from Saudi Arabia, but budget problems linger  

Al-Monitor Pro Members

Stephen Quillen

Tunis-based reporter covering politics, migration, and economics 

July 28, 2023

A $500 million boost from Saudi Arabia is providing short-term relief to Tunisia’s government as it struggles to meet debt obligations and cover the state budget. On July 20, Saudi Arabia committed to a $400 million soft loan and $100 million grant to the North African country, with the promise of further support in coming weeks. The funds will help Tunisia with upcoming financial challenges, such as a $500 million Eurobond payment due in October, and buy it time to continue arduous negotiations with the International Monetary Fund (IMF) over a stalled $1.9 billion loan package that many economists believe is necessary to avoid an eventual default. However, the Tunisian president’s refusal to commit to reforms the IMF loan is conditioned on, particularly subsidy cuts, means such an agreement is likely still far off, leaving Tunisia’s finances teetering on the edge indefinitely.