An IMF Fiscal Transparency Evaluation for Tunisia was published last week. It is based on the following understanding.
Fiscal transparency – the comprehensiveness, clarity, reliability, timeliness, and relevance of public reporting on the past, present, and future state of public finances – is critical for effective fiscal management and accountability. It helps ensure that governments have an accurate picture of their finances when making economic decisions, including of the costs and benefits of policy changes and potential risks to public finances. It also provides legislatures, markets, and citizens with the information they need to hold governments accountable.
The Fiscal Transparency Code and Evaluation are the key elements of the IMF’s ongoing efforts to strengthen fiscal surveillance, policymaking, and accountability among its member countries.
Here is this Evaluation as published on November 8, 2016.
The IMF has today published a Fiscal Transparency Evaluation (FTE) report for Tunisia, which was carried out at the request of the Government of Tunisia by a joint team from the IMF’s Fiscal Affairs and Statistics Departments that visited Tunis in November-December 2016. This report assesses Tunisia’s fiscal transparency practices based on the IMF’s Fiscal Transparency Code.
Tunisia has witnessed a profound transformation of its political institutions in the wake of the 2011 revolution, including a new Constitution that came into force on January 27, 2014. In this context, the authorities have launched several reforms with a view to modernizing public financial management and enhance the transparency of public finances. The establishment of a newly elected government in early 2015 also presents an opportunity to boost the reform agenda in this area.
The FTE—carried out by the IMF team, in close collaboration with key counterparts in the Ministry of Finance and other relevant government agencies—found that while Tunisia performs well against the Fiscal Transparency Code in some areas, improvements are needed in several other areas to bring country practices in line with international standards. Many indicators can be improved in the short term by consolidating and publishing information that are available but fragmented and also by publishing existing analyses that are prepared for internal management purposes.
The report recognizes several key strengths of fiscal transparency practices in Tunisia such as the centralized preparation of fiscal statistics in accordance with the Special Data Dissemination Standard; timely publication of monthly fiscal reports, with comparison between budget forecast and outturn, since 2014; annual reconciliation of budget outturn data with fiscal statistics and final accounts; a clear legal framework defining the time table for adoption of the budget and its key contents; and the use of a supplementary budget to authorize any material changes to the approved budget.
The evaluation also highlights the need to strengthen the government’s ongoing reform process including:
Expanding the coverage of fiscal reports to include the wider public sector and balance sheet information, with an initial emphasis on financial assets and liabilities;
Extending the horizon of fiscal and budgetary forecasts and explicitly stating and reporting on measurable medium-term fiscal policy objectives;
Disclosing financial forecasts of the social security funds in the budget documentation, including all direct and indirect support provided by the State;
Conducting an analysis of the sustainability of public finances in the longer term; and
Commencing the preparation of a fiscal risks statement that provides a consolidated view of all major risks to the public finances and associated mitigation measures.
The Tunisian authorities have welcomed the FTE report. The implementation of the reforms already planned by the authorities and recommended in this report, including publishing existing analyses that are prepared for internal management purposes, will result in a considerable improvement in fiscal transparency in Tunisia in the coming years.
Further information about the new IMF’s Fiscal Transparency Code and Evaluation can be found here.
Meanwhile, Tunisia Economic Outlook on October 31, 2016 as per FOCUSECONOMICS
In Q2, Tunisia’s economy expanded 1.4% from the same quarter of 2015. This was its best performance in more than a year and a solid improvement over Q1’s 1.0% growth, but still far from the strong figures posted before the Arab Spring. The austerity measures which the new unity government is pressing ahead with could further hamper economic growth in the short term in an environment characterized by high unemployment. In this regard, the 2017 budget bill, passed by the parliament early this month, envisages raising taxes, decreasing subsides and freezing public sector wages.