Tunisia’s 2023 finance law expects the budget deficit to fall to 5.2% of GDP thanks to increased revenue through measures, most notably a property wealth tax, officials confirmed on Monday.

The budget says the deficit will reach 5.2% of GDP, up from 7.7% in 2022.

Tunisia is going through a deep financial crisis, which in recent months has resulted in frequent shortages of some basic products, such as sugar, milk, rice and others, amid the acceleration of inflation, which reached 9.8%. in early December.

Finance Minister Siham Al-Boughdiri Nemsieh said the expected revenue is 46.4 billion dinars (about 14 billion euros).

He added at a press conference in Tunis, in the presence of all the ministers of Naglaa Boudin’s government, that the finance law foresees a total budget of around 70 billion dinars (21 billion euros).

The funding should cover a budget deficit of around 23.5 billion dinars (7.5 billion euros) in 2023, which the Minister of Economy, Samir Said, described as a “very difficult year” for Tunisia, with inflation expected to reach 10.5 percent.

To achieve fiscal balance, the State has to resort to external loans of more than four billion euros and internal loans of around three billion euros.

To boost tax revenue, the government has passed measures, including a new 0.5% wealth tax on properties with a net worth of more than three million dinars (900,000 euros).

Cash payments equal to or greater than 5,000 dinars (1,500 euros) are also subject to a fine of 20% of the amount paid.

The government also increased the value-added tax from 13% to 19% for some liberal professions, such as lawyers and translators.

The budget was based on an expected growth rate of 1.8%, an average oil price of US$89 a barrel and an agreement with the International Monetary Fund on a loan of around US$1.9 billion, which is under negotiation for months.