The 2024 draft state budget includes an allocation of TND 3,591 million (MD) for commodity subsidy, compared to TND 3,805 million for 2023, down 5.6%.

According to the draft state budget for 2024, the government relies on a number of assumptions to achieve such a reduction, including a lower price of wheat on global markets to $327 per tonne (compared with $343 per tonne in the updated 2023 budget) and the price of vegetable oil to $1,100 per tonne (compared with $1,250 per tonne in the updated 2023 budget).

The government's assumptions also include the stability of the dinar against the dollar, the implementation of Decree Law No. 2022-14 of March 20, 2022 to combat illegal speculation, and the tightening of controls on the distribution channels for consumer products, especially subsidised grain derivatives.

The government will also work to promote grain crops, especially durum wheat, by guaranteeing the availability of seeds and chemical fertilisers and by increasing grain collection and storage capacity, taking into account the two increases in producer prices for grains in 2022 and 2023.

Commodity subsidy expenditure represents about 31.7% of subsidy expenditure and 2% of GDP, compared to 33.2% and 2.4% respectively in the updated 2023 budget.

Grain production has fallen to 0.3 million tonnes in 2023, compared to an average of 1.2-1.5 million tonnes, due to the rainfall deficit the country has experienced for several years.

The draft state budget for 2024 proposes allocations of around TND 11,337 million for subsidy, compared with TND 11,475 projected for 2023, down 1.2%. The subsidy budget represents 19% of budget expenditure and 6.5% of GDP.

Source: Agence Tunis Afrique Presse