Tunisia PM prioritises economic reform as US welcomes new government

First sign the government intends to launch reforms demanded by lenders

In this photo distributed by the Tunisian Presidency, Tunisian Prime Minister Najla Bouden talks during the the swearing-in ceremony of the new government, Monday, Oct. 11, 2021 in Tunis. Tunisia gotShow more

Tunisian Prime Minister Najla Bouden Romdhane has said fixing public finances and implementing economic reforms is a priority. It is the first sign of the government's intention to launch reforms demanded by lenders and ease the financial crisis.

Ms Bouden met Tuesday with the country's central bank governor and the finance minister to discuss the urgent financial situation facing Tunisia.

“The Prime Minister said the priority of her government is to balance public finances and to proceed with the necessary economic reforms,” a government statement issued on Facebook said of the meeting.

Tunisia's President Kais Saied unveiled a new Cabinet on Monday. Under new rules implemented after Mr Saied suspended much of the constitution last month, the new Cabinet will ultimately answer to him rather than the prime minister.

The new government will have to tackle massive unemployment, a bloated public wage bill, and loans coming due from foreign lenders within the coming weeks.

The central bank said last week it was worried about an acute shortage of external financial resources and foreign currency. It said that financing the budget carries economic risks, including boosting inflation, reducing the bank's reserves and causing a drop in the value of the local currency.

Tunisia needs to raise at least $3.5 billion this year to roll over foreign debts and pay the wages of hundreds of thousands of employees in the public sector.

Tunisia's new government sworn in — pictures

'Welcome step'

The US praised the appointment of the new Tunisian government as a positive step and encouraged further action three months after the presidential seizure of powers.

“The new government, which includes 10 female ministers, is a welcome step forwards towards addressing the significant economic, health and social challenges facing the country,” State Department spokesman Ned Price told reporters.

“We look forward to further announcements to establish a broadly inclusive process for a rapid return to constitutional order."

Mr Saied in July suspended parliament, sacked the government and assumed sole control of the country, following months of growing public anger over an economic crisis and the handling of the Covid-19 pandemic.

Since his consolidation of power he has faced growing pressure from internal and external allies to move the country back towards the democratic process. The US last week voiced disappointment over a crackdown on the media in Tunisia and the use of military courts to try civilians for critical remarks against the government.