May 6, 2019 / 3:16 PM / in a year

Tunisia's govt will make new parliament request to issue up to $800 mln in bonds

TUNIS, May 6 (Reuters) - Tunisia’s finance minister will again seek parliament’s approval to issue bonds worth up to $800 million, lawmakers and a government source said on Monday, a week after its finance committee rejected the plan.

The parliamentary committee’s rejection of the plan last week dealt a severe blow to the government’s efforts to secure funding to cover the country’s fiscal budget deficit, which is expected to reach 3.9 percent of gross domestic product in 2019 compared to about 5 percent last year.

“A second hearing session to finance minister in (the) finance committee is expected,” lawmaker Rim Mahjoub said.

Another Lawmaker told Reuters the second session will probably be held next week. A government source said no deadline had been set but added it could be soon without giving details.

“There is possibility to (tap) ... financial markets by the end of the year if we need, and any possible deal will be according to the opportunities in the markets”, the finance minister Ridha Chalgoum said last week.

The government needs to obtain parliament’s approval to issue bonds on the global financial market. Tunisia needs around $2.5 billion in external financing in 2019, officials said.

The total debt, which hit record levels to reach about 74 percent of GDP by the end of 2018, has become a source of concern for Tunisians, especially opposition parties which accuses the government of seeking easy solutions through borrowing.

Prime Minister Youssef Chahed said earlier this year that painful reforms must be launched to keep its deficit under control, but reform plans face strong resistance from the country’s powerful labour unions. (Reporting By Tarek Amara; editing by Emelia Sithole-Matarise)

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