Inflation has just registered a new record that has not been equaled for more than 36 years. A worrying situation that worries economic experts especially with the current situation of the country’s public finances in the face of an increase in the prices of food, raw materials and fuel.
In fact and according to figures from the National Institute of Statistics (INS), the family consumer price index in Tunisia increased to 8.6% in August after 8.2% in July 2022. , 8.1% in June 2022, 7.8% in May 2022, while it was only 6.7% in January.
Since mid-2021, inflation has not stopped rising. It fell from 4.8% in May 2021 to 6.4% in July 2021 before falling back to 6.2% in September 2021 before resuming its escalation over the following months until it peaked in July 2022. for 31 years and to continue its development in August 2022 to reach a new high of 8.6%.
Some experts and economists have commented on this increase in inflation and presented their reading of the current situation and its consequences.
The economic expert and chairman of the board of the Finance Center for Entrepreneurs, Radhi Meddeb, noted that in Tunisia 73% of the prices are free and 27% are said to be administered, that is, set administratively, and that the increase in the last months is the weighted average between the two . However, administered prices changed by only 0.5%. This means that the so-called free prices increased by 14.1% on an annual basis for the month of August.
And to confirm it it is this level that is perceived by the consumer..! “. And to clarify that ” the increase is not uniform for all products. It was higher for food (+11.9%), education related products (+10%) etc. ie. basic necessities that directly affect purchasing power “.
He recalled that a large part of this inflation is imported, but that the increase in hydrocarbons and the increase in grains for consumption have not yet had an impact on prices in Tunisia, as the state has preferred to continue to take responsibility for them. compensation.
For him, it is obvious that Tunisia’s central bank will continue with further increases in its policy rate over the next few weeks. But to assess it” this is necessary, but strictly speaking insufficient, apart from economic policies with real recovery through supply “.
And to explain that a significant part of the inflation is due to the weak production in Tunisia.
” We will not reverse the upward trend in prices without a real supply shock, a return to production: agriculture, industry and services. BCT’s action alone will do nothing. Economic policy is at stake. «, he assured. And to add: Without a supply shock, inflation levels will necessarily continue to rise. The necessary price regulation of subsidized products can lead to general increases in all prices. He can’t delay any longer. The state’s finances, but also the agreement that took too long with the International Monetary Fund (IMF), make it inevitable “.
Meddeb believes that ” this increase in prices, current and future, makes it difficult to reach an agreement with the union, which is nevertheless required by the IMF to move forward “.
For his part, the Professor of Economics and Management and the President of the Tunisian Institute of Administrators, Moez Joudi, assured that ” Faced with this galloping inflation, the current government is unable to raise wages due to lack of resources and faces accumulation of deficits and weakness in investment and wealth creation “.
For him, if the government increases wages, even under these conditions, there would be a total break with the IMF and inflation would rise further in the face of an increase in the money supply that would not really correspond to the creation of wealth and an increase in the production.
” An unsustainable situation in light of popular discontent, which will be felt even more in the coming weeks “, he said.
For his part, the doctor of economics, teacher-researcher at the University of Carthage and expert consultant, Aram Belhadj, noted that, contrary to the forecasts of some experts, inflation continued to rise. Worse, he believes inflation is likely to rise further in the coming days despite falling prices on world markets. Like Mr. Meddeb, the expert predicts an increase in the policy rate in the coming days, in addition to a tightening of the restrictions on bank loans from BCT.
Mr. Belhadj felt that ” the prices of certain vital products will be increased, with or without the government’s consent “. The latter will also be caught between the hammer and the anvil of the International Monetary Fund by trade union pressure on the issue of wages and compensation in the coming days.
And to support: The coming days will therefore be more difficult than the previous ones on all levels, especially economic and social. There will be no solution to the current crisis, nor the subsequent one, without the unification of efforts and the involvement of all parties in the rescue process. “.
An opinion shared by Radhi Meddeb who confirmed that “ Tunisia is at a historic turning point. The ship is in the heart of the cyclone. It rocks violently “.
And to remember it inflation is a cancer that eats away at people’s purchasing power, destroys the competitiveness of businesses and the economy, prepares for a sharp devaluation, impoverishes the country”. “In this case there are only losers “, he hammered and explained it” it is the responsibility of all stakeholders to show reason for much needed historic compromises, today before tomorrow..! “.
The country’s current economic and financial situation is worrying. Tunisia will not be able to cope with inflation and this rise in international prices indefinitely. It is time to take radical measures, those that have been needed for a long time and that have been delayed by populism or cowardice.