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New Virus Rules Create More Angst for Tunisia’s Battered Economy

Tunisia’s prime minister enacted new restrictions to curb the spread of the coronavirus, in moves likely to further squeeze a ravaged economy already strained by political bickering.

The measures announced by Hichem Mechichi late Saturday on state TV include banning all public gatherings and reducing working hours for the public sector. The North African nation, which initially managed to quell Covid-19, has seen a rapid rise in cases in recent weeks. More than 20,000 people have now been diagnosed since the pandemic began.

Mechichi, who was begrudgingly sworn in by President Kais Saied last month, took the helm as the tourism- and agriculture reliant nation is mired in the latest political crisis to have roiled the country since its 2011 Arab Spring revolt. The new premier is the second chosen by Saied since parliament in January rejected an administration proposed by the moderate Islamist Ennahda party, which has the most seats.

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Before the new restrictions, Tunisia’s economy was on track to contract 7% this year, with a fifth of the workforce expected to be idle.

The central bank last week cut the benchmark interest rate by 50 basis points, its first reduction since March, in a move it said sought to boost the investment climate.

Although inflation has slowed and reserves are able to cover more imports, the bank said the economy contracted 11.9% in the first half of the year compared with the same period in 2019.

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