Tunisia's 2026 Budget: A Delicate Balance Between Economic Relaunch and Financial Risk
By Sofiène Ben Abid, Chartered Accountant and President of the Tunisian Association for Fiscal Governance
The 2026 budget bill promises an economic relaunch accompanied by efforts to support salaries and the most vulnerable populations. However, behind this optimistic discourse, the numbers tell a different story: that of a state that is increasingly borrowing, even resorting to directly tapping into the Central Bank's coffers. This audacious - or perilous - gamble could redefine the country's monetary balances.
A Budget Under Permanent Tension
For 2026, the Tunisian state forecasts 63.6 billion dinars in expenses against 52.5 billion dinars in revenue. The deficit thus amounts to over 11 billion dinars, or nearly 8% of GDP. To fill this gap, the government is counting on 19 billion dinars in domestic borrowing, nearly 7 billion dinars in foreign borrowing, and 1.2 billion dinars in treasury resources. In other words, nearly half of the budget depends on debt.
This chronic imbalance is fueling growing concern: for several years now, banks, the primary holders of treasury bonds, have seen a growing share of their resources absorbed by state financing, to the detriment of credit to the real economy. This mechanism, which has become structural, maintains a lasting crowding-out effect that asphyxiates SMEs and hinders the recovery of productive investment.
When the Central Bank Becomes the Treasury's Plan B
Article 12 of the bill has had a déjà-vu effect. For the third consecutive year, the Central Bank is being called upon to rescue the Treasury. After 7 billion dinars in 2024 and 7 billion dinars in 2025, the state plans to borrow an additional 11 billion dinars in 2026, without interest and over 15 years, with a three-year grace period. Presented as "exceptional," this solution has become the silent norm of Tunisian budget financing. But at what cost? Each dinar created by the Central Bank fuels inflation a little more, undermines the credibility of monetary policy, and weakens the dinar against foreign currencies. The danger is all the greater as this dependence becomes structural: the printing press is no longer a crutch, it's becoming a habit.
Fiscal Equity... or the Temptation to Tax More
Under the guise of social justice, several measures translate into an increase in tax pressure. The most symbolic: the wealth tax, which will affect assets over 3 million dinars, at rates of 0.5% to 1%. A first in the Tunisian tax landscape, but also a headache: how to precisely evaluate assets in an economy where patrimonial transparency is almost non-existent? The measure could, paradoxically, encourage concealment or tax exile. Other provisions increase the burden: increased registration fees, new tax stamps, exceptional contributions for banks, insurance companies, or telecoms. Companies, already fragile, see this as a worrying signal: that of a state seeking money where it still exists, rather than broadening the tax base.
A Generous Mechanism to be Framed
Among the most commented-on innovations, Article 39 introduces the unlimited deductibility of donations to community organizations. The intention is positive: to support structures with a collective vocation and strengthen local cohesion. But this measure carries a risk of drift if it is not strictly framed. A company subject to tax could, in practice, direct a portion of its profits to community organizations linked to it, in the form of fully deductible "donations." As community organizations are exempt from corporate tax, a portion of these revenues would thus escape tax while remaining within the economic sphere of influence of the donor company. The idea of promoting territorial solidarity remains legitimate, but it requires clear safeguards to avoid the device becoming a tool for tax optimization or disguised tax evasion.
Budget Commitments Without a Sustainable Strategy
The bill multiplies commitments: increases in public salaries over three years (2026-2028), support for retirees, creation of funds for housing, health, or disability. Announcements with a strong symbolic impact, but whose financing remains unclear and overall coherence difficult to perceive. Without structural reform of the public function, or significant relaunch of growth, these promises could transform solidarity into a lasting budget burden. Each new special fund - housing, inclusion, energy, health - complicates the management of public finances and reduces the readability of the budget.
Tunisia Facing the Test of Reality
In 2026, Tunisia will have to repay over 15 billion dinars in debt, nearly half of which is in foreign currency. Faced with restricted access to external financing, the state is turning increasingly to internal resources to cover its budgetary needs. The temptation of monetary financing is becoming a last resort... but a dangerous one. For in the medium term, this choice could result in persistent inflation, a decline in purchasing power, and a loss of confidence in the dinar. In other words, a shift towards an economy where adjustment is made not by reform, but by the silent devaluation of the currency.
Conclusion: Between Political Courage and a Risky Gamble
The 2026 finance law illustrates the Tunisian dilemma: responding to the economic crisis without plunging into a financial crisis. The text claims to be a bearer of equity and hope, but it relies on fragile and sometimes risky mechanisms:
- Allowing the Central Bank to directly finance the budget is crossing a red economic line.
- Multiplying taxes without reforming public spending is exhausting taxpayers without restoring balances. Tunisia needed a relaunch budget; it is inheriting a survival budget. The challenge, now, will be to avoid this survival becoming budgetary and monetary dependence. S.B.A
Note: The opinion expressed in this editorial only engages its author. It is the expression of a personal point of view.
