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Tunisia to receive $500 million Saudi loan

Tunisia_Saudi_DPA
Tunisian President Beji Caid Essebsi (R) shakes hands with Saudi Crown Prince Mohammed bin Salman (L)

Saudi Arabia will give Tunisia a $500 million loan at a favorable interest rate, a source told Reuters on Wednesday, a day after a visit from the Saudi crown prince that drew Tunisian protests.

 

The crown prince was received by President Beji Caid Essebsi on Tuesday, who awarded him the republic's medal, the highest official award. Tunisia has struggled economically and is hungry for foreign funding.

"Tunisia will announce in a few days important deals with Saudi, including a loan with low interest rate, agreements on investment and other important details," Nourredine Ben Ticha, an advisor to the president, told state television.

Tunisia is struggling to cut its budget deficit, stabilize falling foreign currency reserves and manage expectations of international lenders demanding reforms such as trimming the public wage bill.

Tunisia’s economy has been in turmoil since autocrat Zine al-Abidine Ben Ali was toppled in a 2011 uprising sparked by anger at unemployment, poverty and record levels of inflation.

Under pressure from the International Monetary Fund, Prime Minister Youssef Chahed has aimed to cut the budget deficit to about 4.9 percent of GDP this year from 6.2 percent last year.

The crown prince told Tunisian state television that Saudi Arabia has long had good relations with Tunisia, adding, "I cannot come to North Africa without visiting Tunisia...Tunisia’s president is like my father."

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