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Tunisia suspends energy price hike after protests

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Tunisia’s outgoing government, on Thursday, said it had suspended the planned energy price hike in that country.

The suspension was the second policy reversal in two weeks, after popular protests forced the government to scrap a tax increase envisaged under its 2014 budget.

Three years after toppling autocratic leader Zine El-Abidine Ben Ali in an uprising, Tunisians were chafing under high living costs and a lack of economic opportunities.

But international lenders were pressing Tunisia to trim public subidies to cut a budget deficit which the government expected to have reached 6.8 per cent of national output last year.

Tunisia had initially budgeted 2.59 billion dollars for food and energy subsidies in 2014, down from five billion dinars in 2013.

The Tunisian Finance Minister, Ilyas Fakhfakh, told the state news agency TAP “we have decided to suspend the planned 2014 increase in energy prices.’’

He said revenues from the planned increase had been expected to total 220 million dinars in 2014.

Fakhfakh, who with other ministers stepped down shortly under an accord that transfered power to a caretaker government, did not comment on how the budget shortfall might be covered.

Last week, protests and strikes prompted the outgoing Islamist-led government to suspend a hike in vehicle tax.

The Tunisian finance minister told Reuters last week that the government took the necessary measures to keep the budget deficit under control.

Reuters