Summary:

On 24 February 2025, Africa Intelligence reported that Tunisia officially cut off communication with the International Monetary Fund (IMF), seemingly ending a multi-year negotiation process over a $2 billion loan deal that stalled in late 2022. 

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According to the same source, Tunisia has decided not to reschedule the meeting with the IMF mission which was scheduled to visit Tunisia from December 2023 for consultations. However, these decisions have not yet been confirmed by an official Tunisian government source. 

In April 2023, Tunisian President Saied rejected a $1.9 billion loan agreement with the IMF, saying the “diktats” laid down by the international lender were unacceptable. The agreement failed to move forward after the IMF demanded guarantees on the implementation of a reform package before disbursing the first tranche of a $1.9 billion loan agreement. Reforms insisted upon by the IMF included gradually reducing the subsidy system, reforming public institutions, and controlling the wage bill, all of which are opposed by the Tunisian government as well as various unions. 

The Tunisian government is seeking other alternatives to overcome its economic difficulties. The European Investment Bank (EIB) has granted Tunisia more than 415 million euros (equivalent to 1.3 billion dinars) in financing to support strategic projects in key sectors. Additionally, Italy and Saudi Arabia have both shown a willingness to provide stopgap funding.  

Outlook: 

While cutting communication with the IMF sends a strong domestic message to the administration’s political supporters, the economic and social consequences could be severe. Without alternative financial agreements that go beyond stopgap funding, Tunisia risks a deepening economic crisis, that brings increased likelihood of social unrest and political instability.  

With inflation projected to reach 9.1 percent over the next five years, pressure on prices and the cost of living could sow deeper frustrations among Tunisians, particularly those not employed in government positions. 

This decision could mark a shift in Tunisia’s economic and diplomatic policy, diminishing the influence of funding partners like the IMF. Though the Saied administration has resisted and delayed an IMF deal for years now, the total rejection of the negotiation process makes the turn away from the IMF final. The administration may be betting that European partners, including Italy and France, will continue to provide funding in order to prevent a worsening of the migration crisis. However, isolation from the IMF and global funding organizations risks weakening the country’s creditworthiness overall. 

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