Tunisia has reached a preliminary agreement with the International Monetary Fund (IMF) for a $1.9 billion rescue package that could be finalised in December, the fund said on Saturday.
Tunisia has been in urgent need of international help for months as it grapples with a crisis in public finances that has raised fears it may default on debt and has contributed to shortages of food and fuel, according to government critics.
The agreement is also seen as critical to unlock bilateral aid from country donors that wanted the reassurance of an IMF programme that Tunisia would carry out reforms to put its finances on a more sustainable footing.
Diplomats say many donors felt "burnt" by previous loan agreements in which Tunisia has taken billions of dollars without following through on promised reforms.
"The agreement is an important step for Tunisia's public finances and will allow Tunisia to borrow from some bilateral sources," a senior Tunisian official said on condition of anonymity. This month the central bank governor told Reuters that bilateral financing talks were progressing with Saudi Arabia.
Opposition politicians and Tunisia's powerful UGTT labour union have warned of a possible "social explosion" if people's needs are not met, with a petrol shortage causing long queues this week at fuel stations.
The staff-level agreement is for a $1.9 billion 48-month package through the IMF's extended fund facility to restore macroeconomic stability, strengthen social safety nets and tax equity and bring reforms to foster growth and create jobs. It is subject to the approval of the IMF board, which is scheduled to discuss Tunisia's programme request in December, the fund said.
