Tunisian president Beji Caid Essebsi. Pic: Fethi Belaid / AFP

London. Nov 11, 2017, (AltAfrika)-Tunisia’s trade deficit widened by 23.5 percent year-on-year in the first 10 months of 2017 to 13.210 billion dinars ($5.28 billion), a record level, the State Statistics Institute said on Friday.

The deficit was 10.710 billion dinars in the same period last year and 12.6 billion dinars in all of 2016.

It widened after imports rose by 19.6% to 40.850 billion dinars.

The growing deficit is one of the main problems facing the government of Prime Minister Youssef Chahed.

Erosion of foreign currency reserves

It has contributed to an erosion of Tunisia’s foreign currency reserves, which can now cover just 93 days of imports.

“The trade deficit reached an historic and dangerous level, we must stop bleeding,” central bank Governor Chedli Ayari told reporters.

Last week, the central bank ordered local lenders to stop financing imports of about 220 products – from fish to perfume – as the country tries to curb its trade deficit.

Praised for its successful democratic transition after a 2011 uprising, Tunisia has struggled with tough economic reforms to reduce public spending agreed with its international lenders.

Last month, the prime minister’s economic adviser, Ridha Saidi, told Reuters the government would raise taxes on some goods imported from abroad, such as cosmetics and some agricultural products, to help narrow the trade deficit.

Reuters