Tunisia to lift bread prices for first time since revolution, sell Eurobonds

Freight wagons are seen at the train station in Tunis, Tunisia, on November 16, 2017. Tunisia plans to slightly increase bread prices for the first time since its 2011 revolution and sell Eurobonds worth €500 million as it seeks to slash a budget deficit. (REUTERS/Zoubeir Souissi)
Updated 25 November 2017
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Tunisia to lift bread prices for first time since revolution, sell Eurobonds

TUNIS: Tunisia plans to slightly increase bread prices for the first time since its 2011 revolution and sell Eurobonds worth €500 million ($593.20 million) as it seeks to slash a budget deficit, an economic adviser told Reuters.
The North African country is under pressure from the International Monetary Fund (IMF) to cut its deficit and overhaul its economy, in turmoil since the 2011 toppling of Zine Al-Abidine Ben Ali.
Tunisia is struggling with high unemployment as foreign investments have dried up since 2011 while militant attacks have hit the vital tourism sector.
The government plans to keep subsidies flat in 2018 but this will mean small price increases for some subsidized goods, as it will not match an expected rise in prices for imported petrol or wheat, said Ridha Saidi, an adviser to the prime minister.
“The price of bread will ... rise by at least 10 millimes (about half a US cent), or perhaps a little more than that,” he said in an interview on Thursday, referring to a loaf of bread, which normally costs 0.19 dinars. There are 1000 millimes to the dinar.
The last time Tunisia tried increasing bread prices was in 2010 in the final stages of the Ben Ali regime — authorities reversed the increase within months in a vain attempt to curb dissent, which eventually swept away the strongman.
“There is an intention to gradually adjust the price of tea and coffee as well,” Saidi said, adding that drinking water would also become more expensive.
The Tunisian dinar has lost against hard currency this year, making imports more expensive.
Parliament started debating the budget draft this week, calling also for increases in taxes and social security contributions, a move opposed by business associations.
Saidi said authorities wanted to issue Eurobonds worth about €500 million in the first quarter to help finance the budget.
He said the expected pricing would be probably in a similar range to February when Tunisia sold a seven-year bond worth €850 million at a yield of 5.75 percent.
The government also wants to sell bonds worth 2.2 billion dinars in the local market, he said.
In April, the IMF agreed to release a delayed $320 million tranche of Tunisia’s $2.8 billion in loans, on condition that it raise tax revenue, reducing the public wage bill and cut popular energy subsidies.
—  REUTERS


LIVE: Future Investment Initiative opens in Saudi Arabia

Updated 3 min 31 sec ago
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LIVE: Future Investment Initiative opens in Saudi Arabia

DUBAI: The three-day Future Investment Initiatives (FII), which starts today, is expected to attract thousands of delegates and see deals worth hundreds of billions of dollars.

 

 

 

The three-day event will likely see investment partnerships from Russia and China being forged, as noted by Ellen Wald, president of the Transversal Consulting think-tank and author of the recent book “Saudi Inc,” with executives still looking to do business at the Riyadh meeting despite some having pulled out.

 

 

 

Executives from the Russian Direct Investment Fund, Russia-China Investment Fund and electronics giant Samsung are listed to speak at the event, joining Saudi speakers including Energy Minister Khalid Al-Falih, Yasir Al-Rumayyan, head of the Public Investment Fund, and sports official Princess Reema bint Bandar.

 

 

“Investing in transformation,” “technology as opportunity” and “advancing human potential” are among the FII’s themes. Held at the Ritz-Carlton hotel in Riyadh, the three-day event is billed as a “blueprint for the 22nd century.”

 

 

Click for more of our coverage of the Future Investment Initiatives.