- Title: Tunisia PM targets three percent economic growth in 2017
- Date: 30th September 2016
- Summary: BARDO, TUNISIA (FILE - AUGUST 26, 2016) (REUTERS) ***WARNING CONTAINS FLASH PHOTOGRAPHY*** VARIOUS OF CONFIDENCE VOTE ON YOUSSEF CHAHED
- Embargoed: 15th October 2016 20:39
- Keywords: Tunis Tunisia Youssef Chahed economy growth unions
- Location: TUNIS, TUNISIA
- City: TUNIS, TUNISIA
- Country: Tunisia
- Topics: Budget/Taxation/Revenue,Government/Politics
- Reuters ID: LVA00251RFCJR
- Aspect Ratio: 16:9
- Story Text: Tunisia's prime minister said on Thursday (September 29) he plans key talks with unions to hold down state sector wages while targeting close to 3 percent economic growth next year from a package of reforms aimed at underpinning the democracy won in the 2011 revolution with economic gains.
Opportunities and jobs are a constant demand from younger Tunisians frustrated that economic progress has not matched the political transition to democracy since the uprising that ousted autocrat Zine El-Abidine Ben Ali as president.
Western backers often praise Tunisia as a model of success for a region mired in violence. But successive governments since 2011 have failed to create jobs or carry out reductions in the public deficit demanded by their international lenders.
It is a delicate balance for the government.
Austerity measures like a vehicle tax proposed in 2014 or lack of jobs in the past have triggered the kind of protests among young Tunisians that helped topple Ben Ali and there were riots over jobs in the south at the start of this year.
The new Prime Minister Youssef Chahed, a French-educated agriculture specialist in office less than a month, is sensitive to how fragile the social peace is in Tunisia but expressed confidence that he could deliver on reforms with his new national unity government.
Tunisia faces a debt service payment of $3 billion next year, and the central bank has warned the government may struggle to come up with the $450 million a month it needs to pay public employees.
The public wage sector represents a huge portion of Tunisia's public spending, but success on curbing public pay will depend on negotiations with the powerful UGTT and UTICA labour unions on whether they will allow a freeze in wage increases and in public sector recruitment.
Chahed's measures include reducing tax evasion and incorporating the informal, non-taxed businesses into the tax-paying economy. A new tax on companies is also in the works.
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