Tunisia 2026 under Saied: the IMF-less path, BCT monetary financing, and Brussels as last creditor

October 2024 election and the consolidation of presidential rule #

On October 6, 2024 the Instance Superieure Independante pour les Elections (ISIE) declared Kais Saied reelected with 90.69 percent of valid votes cast, against 7.35 percent for Ayachi Zammel and 1.97 percent for Zouhair Maghzaoui. Reported turnout of 28.8 percent was the lowest in any national election since the 2011 constituent vote, and below the 49 percent recorded for the first round of the 2019 presidential contest that brought Saied to office. Zammel had been sentenced to twelve years in prison on signature falsification charges three weeks before polling, and most opposition figures linked to the National Salvation Front, including Ennahda president Rached Ghannouchi, remained in pretrial detention. The administrative court rulings that briefly readmitted three additional candidates were overridden by an October 1 parliamentary amendment that stripped the court of electoral oversight, a sequence Reuters and Le Monde documented in real time.

The institutional backdrop is the July 25, 2022 referendum constitution, which replaced the 2014 mixed parliamentary arrangement with a fully presidential system. The president appoints the prime minister without parliamentary consultation and rules by decree under Article 80. The Assembly of the Representatives of the People, elected in two rounds in December 2022 and January 2023 on 11.4 percent turnout, exercises no effective check. The judicial council was dissolved by decree in February 2022 and replaced with a body whose members the president can dismiss. For sovereign analysts the operational consequence is that policy announcements out of Carthage Palace function as binding instructions to the BCT, INS, and Ministry of Finance, with no judicial review of fiscal or monetary measures.

The IMF deal that died: October 2022 staff agreement to April 2023 collapse #

Tunisia and IMF staff reached a staff-level agreement on October 15, 2022 for a 48 month USD 1.9 billion EFF, equivalent to 400 percent of quota. The program was conditioned on three structural anchors: a phased compression of energy and food subsidies from 8.5 percent of GDP toward roughly 4 percent, a public wage bill reduction from 15.6 percent of GDP toward 12.6 percent including SOE consolidation, and a fiscal deficit path narrowing from 7.7 percent of GDP in 2022 to 2.6 percent by 2026. UGTT, the historically dominant trade union confederation that won the 2015 Nobel Peace Prize, declared the wage and subsidy components unacceptable in a December 2022 communique, and a national strike on June 16, 2022 had already signaled the political ceiling.

On April 6, 2023 Saied publicly stated that he would not accept the IMF terms, which he characterized as foreign dictates. Board consideration, originally scheduled for December 19, 2022, was indefinitely postponed. The G7 communique from Hiroshima in May 2023 conditioned EUR 1.9 billion of European pledges on a Fund program that has not materialized. Three years on, the Tunisian authorities have not requested resumption of negotiations, and IMF Article IV consultations have continued on a surveillance-only basis, with the most recent staff visit concluding in March 2025 without a program track. The strategic implication is that Tunisia now sits in the small group of MENA sovereigns that have actively rejected, rather than failed to qualify for, IMF conditionality, a position closer to Algeria and Libya than to Egypt or Morocco.

Macro snapshot: 0.4 percent growth, 7.0 percent inflation, 5 months of cover #

INS provisional figures place real GDP growth at 0.4 percent in 2024, after a flat 2023 and a 2.6 percent rebound year in 2022. Sectorally, agriculture contracted 4.4 percent in 2024 under the sixth consecutive drought year, with cereal output of 1.0 million tons against a 1.5 million ton ten year average (Ministry of Agriculture). Manufacturing was flat with mechanical and electrical exports under pressure from European demand softening. Tourism was the bright spot: arrivals reached 10.25 million in 2024 (Ministry of Tourism), a record above the 9.4 million 2019 baseline, with receipts of TND 7.4 billion or roughly USD 2.4 billion local equivalent and total foreign currency tourism earnings of USD 6.4 billion (BCT services balance). Phosphate exports recovered to 2.5 million tons in 2024 from 0.7 million tons during the 2023 Gafsa labor disputes, against a pre 2010 baseline of approximately 8.0 million tons.

Inflation has eased without monetary tightening. CPI peaked at 10.4 percent in February 2023, ran at 9.3 percent for most of 2023, and decelerated to 7.0 percent by December 2024 (INS), with food inflation easing from 14.0 to 8.5 percent over the same window. The BCT policy rate has been held at 8.00 percent since December 2022. Disinflation has therefore been driven by base effects, dinar stability inside the managed regime, and softer global food prices, rather than by tighter financial conditions. Real ex post policy rates moved from negative 1 to 2 percent in 2023 to roughly positive 1 percent in 2024, while domestic Treasury yields cleared at 13 to 14 percent across the curve and effective banking sector funding costs ran above headline inflation. Reserves at USD 8.5 billion cover roughly 5.0 months of imports, above the 90 day prudential floor but inside the band where rollover risk and energy import shocks are first order.

BCT monetary financing: Law 39/2024 and the TND 14.45 billion direct facility #

On February 7, 2024 the Tunisian parliament approved an amendment to the BCT statute, codified as Law 39/2024, that authorized the central bank to lend directly to the Treasury. The 2016 BCT independence law had explicitly prohibited monetary financing of the budget, a covenant that had survived the 2011 transition and the 2014 constitution. Under the new arrangement the BCT extended TND 7.0 billion to the Treasury in February 2024 at zero interest with a ten year maturity and a three year grace period, used principally to amortize a EUR 850 million external bond maturing that same month. A second tranche of TND 7.45 billion was disbursed in February 2025 on identical terms, financing in part the EUR 750 million February 2025 Eurobond redemption.

The cumulative TND 14.45 billion, equivalent to roughly USD 4.6 billion or 8 percent of 2024 GDP, has substituted for external market access that closed after the 2023 IMF impasse. The fiscal arithmetic is mechanical: the 2025 budget law projects gross financing needs of TND 28.7 billion (Ministry of Finance), of which TND 19.7 billion is domestic and TND 8.9 billion external, against external rollovers of TND 10.4 billion. Without the BCT facility, the residual would clear only at distressed yields or via accumulation of arrears. The BCT balance sheet has absorbed the cost: Treasury claims rose from TND 1.1 billion in January 2024 to TND 14.6 billion by March 2025 (BCT monthly statistics). The mechanism is, in form, a soft restructuring of fiscal claims onto the central bank, with the inflation tax and reserve depletion as the eventual settlement channels rather than a formal default.

The EU Memorandum, migration, and Brussels as marginal creditor #

On July 16, 2023 European Commission President Ursula von der Leyen, Italian Prime Minister Giorgia Meloni, and Dutch Prime Minister Mark Rutte signed a Memorandum of Understanding with President Saied in Tunis. The package committed EUR 105 million for migration management, including border surveillance equipment, return operations, and Tunisian Coast Guard support, and EUR 150 million in macro-financial budget support, with an additional EUR 900 million in macro-financial assistance held conditional on a future IMF program. The migration tranche has disbursed in stages through 2024 and Q1 2025, with the European Court of Auditors and the European Parliament Civil Liberties Committee questioning compliance with EU human rights conditionality after Tunisian security forces expelled an estimated 1,200 sub-Saharan migrants into the Libyan and Algerian desert frontiers in mid 2023, and ongoing Mediterranean Sea deaths along the Sfax to Lampedusa corridor that the Missing Migrants Project recorded at over 2,000 in 2023 and roughly 900 in 2024.

The migration co-benefit for Brussels is measurable. Frontex sea arrivals to Italy from the Tunisian coast peaked at 97,300 in 2023 and fell to 28,400 in 2024 according to Frontex monthly bulletins and the Italian Interior Ministry, a 71 percent reduction. Italian bilateral cooperation, including the Rome Process announced in July 2023 and the Mattei Plan, layers on top of the EU package and ties Italian energy import diversification, including the SoutH2 corridor and the TransMed Algeria route that transits Tunisian territory, to migration cooperation. For Tunisian fiscal authorities, the EUR 150 million budget support and EUR 105 million migration tranche, supplemented by IMF SDR allocations from 2021 and bilateral disbursements from the UAE (USD 500 million 2023 deposit at the BCT), Saudi Arabia (USD 400 million 2023 grant element), and Algeria (USD 300 million 2023 deposit), have effectively substituted for capital market access at the margin, although none individually approaches the scale of the abandoned EFF.

Implications for sovereign creditors, multinationals, and donors #

For sovereign creditors holding Tunisian Eurobonds, the operational signal from the 2024 and 2025 BCT operations is that the authorities prioritize hard currency external rollovers over domestic price stability, a sequencing visible in the 2024 amortization of the EUR 850 million bond and the 2025 amortization of the EUR 750 million bond. With external curves clearing near 11 percent in USD terms and primary market access closed since 2020, refinancing is dependent on bilateral Gulf deposits, EU budget support, and the BCT facility. The next pressure points are the EUR 700 million October 2026 maturity and a Japanese-yen Samurai redemption in 2027, both of which exhaust comfortably the headroom under the current Law 39/2024 framework unless a fresh tranche is legislated. The implied recovery distribution remains anchored by the absence of a formal default, but the equilibrium is structurally fragile and a disorderly devaluation of the dinar is the central tail risk.

For multinationals operating in Tunisia, particularly in automotive wiring (Yazaki, Sumitomo, Leoni) and aerospace (Safran, Latecoere), the binding constraints are FX access, residual controls on dividend repatriation, and the legal uncertainty introduced by Law 18/2023 on the prosecution of false news. Sourcing decisions are increasingly being arbitraged toward Morocco, where Tangier Med and a stable IMF Flexible Credit Line provide a more predictable macro envelope. For European donors, the question is whether budget support absent IMF anchoring subsidizes a heterodox model, or whether withholding it accelerates a balance of payments crisis whose first-order consequence is a migration surge. Brussels has, through the 2023 MoU and 2024 to 2025 disbursements, chosen the first option. Argus assesses that path as sustainable for 18 to 24 months further, after which either an IMF return, a deeper Gulf bilateral package, or a disorderly adjustment becomes the binding outcome.

Sources #

• Banque Centrale de Tunisie, monthly statistical bulletins and reserves data
• Institut National de la Statistique (INS), national accounts and CPI
• Tunisia Ministry of Finance, budget laws and debt bulletins
• ISIE, October 2024 presidential election final results
• IMF Article IV consultations and Tunisia country page
• European Commission, Tunisia EU Memorandum of Understanding July 2023
• Frontex, Central Mediterranean migratory route monthly data
• Reuters Tunis bureau coverage of 2024 election and IMF talks
• Financial Times, Tunisia sovereign coverage 2023 to 2025
• World Bank Tunisia Economic Monitor and country data
• Missing Migrants Project, IOM Mediterranean route data
• Tunisia Ministry of Tourism, 2024 arrivals and receipts