The Tunisian government will again seek exceptional direct financing from the Tunisian central bank in 2026, aiming to raise up to $3.7 billion to address a widening fiscal deficit, according to a draft budget bill reviewed by Reuters.

The move comes as Tunisia continues to struggle with one of the worst economic crises in its modern history, marked by mounting public debt, sluggish growth, and restricted access to international financial markets.

Since President Kais Saied assumed sweeping powers in 2021, a move the opposition described as a coup, Tunisia’s economy has been under intense pressure. The government has faced growing difficulty in securing foreign financing, forcing it to turn inward to cover pressing expenditures.

This year, Tunisian authorities borrowed $2.3 billion to repay urgent debts, a move that sparked warnings from economic experts about potential inflationary fallout and long-term financial instability.

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Experts warn of inflation and domestic debt risks

Economists have cautioned that Tunisia’s increasing dependence on domestic borrowing could strain the banking sector and divert capital away from the real economy.

The 2026 financial plan projects that internal and external financing needs will reach 27 billion dinars ($9.2 billion), a level similar to this year. The government also plans to issue Islamic bonds worth 7 billion dinars ($2.3 billion) for the first time, further diversifying its debt instruments.

The draft budget projects a rise in total spending from 59.8 billion dinars ($20.4 billion) to 63.5 billion dinars ($21.7 billion). In an effort to contain public discontent and support household income, the government plans to increase wages in both the public and private sectors over the next three years.

Additionally, a wealth tax in Tunisia will be introduced. The 2026 budget proposes a 1% tax on properties valued above 5 million dinars ($1.7 million), a measure aimed at increasing state revenues and addressing growing fiscal pressure.

Growing pressure on Tunisia’s banking sector

Analysts warn that if this trajectory continues, domestic financial institutions could face liquidity shortages and be forced to prioritize government debt over private sector investment, undermining long-term growth.

With few external options remaining, Tunisia’s economy is increasingly reliant on internal stopgap measures, while structural reforms and international negotiations, such as talks with the International Monetary Fund, remain stalled.

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