The North African country raised from January 1 the price of gasoil and some goods as well taxes on cars, phone calls, the internet, hotel accommodation and other items, part of austerity measures agreed with its foreign lenders. The economy has been in crisis since a 2011 uprising unseated the old regime and two major militant attacks in 2015 hit the tourism sector, which comprises 8 percent of GDP and is a key source of foreign revenues.
Police fired tear gas in the central city of Thala to disperse hundreds demanding more development and jobs while protesting against high inflation. The protesters burned wheels and threw stones at the police,
Mohamed Hedi Omria, a resident, told Reuters. Clashes were also reported from Kasserine, another impoverished central town where hundreds protested against price increases. In the capital Tunis security forces dispersed small protests late on Sunday against rising prices and taxes.
On Monday, about 300 people took to the streets in the central Tunisian town of Sidi Bouzid, cradle of the country's Arab Spring revolution, carrying banners aloft with slogans denouncing high prices. A lack of tourists and new foreign investors scared of turmoil pushed the trade deficit up by 23.5 percent year-on-year in the first 11 months of 2017 to a record high $5.8 billion, official data showed at the end of December.
Concerns about the rising deficit have hurt the dinar, sending it to 3.011 versus the euro on Monday, breaking the psychologically important three dinar mark for the first time, traders said. The currency is likely to weaken further, said local financial risk expert Mourad Hattab.
"The sharp decline of the dinar threatens to deepen the trade deficit and make debt service payments tighter, which will increase Tunisia's financial difficulties," he said.