Public Finances Hold Steady in June 2024
We've already reached June 2024, and public finances are holding up well. Compared to the last two years, supply chain issues for basic goods are significantly less severe, and we haven't experienced any incidents related to fuel distribution. There's been a considerable effort to mobilize internal resources, even if it absorbs available liquidity in the market and maintains high interest rates. While the current budget surplus is only provisional and the balance remains fragile, the current state of affairs gives hope that the state's accounts are on the path to recovery.
Budget and Debt Repayment
It's worth noting that the budget doesn't account for the repayment of principal debts, both internal and external. Examining the debt repayment schedule helps us understand the pressures on the Treasury's current account and the actions it may take.
On the internal debt front, there are three main deadlines, all related to short-term Treasury bonds:
- BTCT 26 weeks, due June 14, 2024: 122.3 billion dinars
- BTCT 26 weeks, due June 17, 2024: 1,000 billion dinars
- BTCT 52 weeks, due June 24, 2024: 960 billion dinars
In total, 2,082.3 billion dinars need to be paid. On the external debt front, there are no significant deadlines. There are tranches of financing from the IMF (25.6 million USD), Afreximbank 2022 (34 million USD), and an FMA credit (14 million USD).
Upcoming Challenges
The question, now that we're in June, is whether the state will resort to a new tranche of direct financing from the Central Bank of Tunisia (BCT). We don't know if salaries will be paid in advance due to the upcoming Eid celebrations. If so, it's likely that part of the internal debt will be repaid with that money.
Currently, the Treasury's current account shows a surplus of 1,545 billion dinars, a comfortable position. There are outflows on the local market, but the emissions are small. This is worth monitoring, especially since we'll see a surge in the volume of banknotes and coins in circulation over the next two weeks. This is a recurring pattern ahead of major Tunisian family gatherings. There's a risk of liquidity drying up, and the BCT should intervene massively to inject the necessary amounts to ensure the economy's smooth functioning. It has the means and expertise to do so without being felt.
