As of October 1, 2026, Tunisia's Treasury bonds have reached 37.23 billion dinars, according to the Central Bank of Tunisia. This represents a significant increase of 5.69 billion dinars, or 18.1%, over the past year. The surge in Treasury bonds has sparked concerns about its potential effects on the financing of local businesses, household credit, and public finances. The substantial rise in these bonds has led to questions about how this will influence the overall economy.
The majority of these Treasury bonds, 35.539 billion dinars, are in the form of assimilable Treasury bonds (BTA), which are medium- and long-term securities issued by the state. This represents a 7.029 billion dinar increase, or 24.7%, over the past 12 months. In contrast, short-term Treasury bonds have decreased from 3.026 billion dinars to 1.691 billion dinars, a decline of 44.1%. The BTAs now account for approximately 95.5% of all Treasury bonds in circulation.
Treasury bonds enable the state to borrow dinars on the local market to cover its financing needs and refinance some of its maturing debt. While this may not directly affect individuals, it can have an indirect impact through the banking system. Banks can subscribe to and hold Treasury bonds in their portfolios, which may lead to competition for resources with local businesses and households. This phenomenon is known as the "crowding out effect," where increased state borrowing may limit the availability of credit for other sectors.
The impact of Treasury bonds on the local economy is complex and depends on various factors. The increased borrowing by the state may lead to a rise in interest rates, making it more expensive for businesses and households to access credit. This, in turn, may affect their ability to invest and consume, potentially slowing down economic growth. However, it is essential to note that a rise in Treasury bonds does not automatically lead to a decline in credit, but rather it influences the allocation of available resources.
According to the Ministry of Finance, the 2026 finance law plans for 19.056 billion dinars in domestic borrowing. This includes 4.84 billion dinars in BTAs, 2.5 billion dinars in short-term Treasury bonds, and 11.716 billion dinars in other domestic loans. These figures represent the planned borrowing for 2026 and should not be directly compared to the 7.029 billion dinar increase in BTAs over the past year.
It is crucial to consider that Treasury bonds have to be repaid at maturity and incur interest payments. The evolution of their outstanding value will, therefore, impact future financing needs. As the state's borrowing increases, it is essential to monitor the effects on the local economy and ensure that the financing needs of businesses and households are met.
The Central Bank of Tunisia and the Ministry of Finance will likely continue to monitor the situation and implement policies to mitigate any potential negative effects on the economy. The goal is to strike a balance between the state's financing needs and the requirements of local businesses and households, ensuring sustainable economic growth and stability.
Key points
- The increase in Treasury bonds may lead to a rise in interest rates, affecting the financing costs for local businesses and households.
- The "crowding out effect" may occur, where increased state borrowing limits the availability of credit for other sectors.
- The evolution of Treasury bonds' outstanding value will impact future financing needs and the overall economy.
