PM Chahed, under pressure from the IMF, is battling to cut budget deficit to 4.9 percent of GDP from 6.2 percent.

Tunisian civil servants have gone on strike around the country to protest the failure of negotiations with the government for wage increases, as buying power plunges and inflation soars.

About 650,000 public sector workers were joined by thousands of other people across Tunisia on Thursday to protest the government’s refusal to raise wages amid threats from international lenders to stop financing its tattered economy.

Thousands gathered in front of parliament with chants of “shame on the government” and calls to be given their “rights.”

Schools, universities, municipalities and ministries were shut and hospitals had only emergency staffing in the nationwide walkout organised by the UGTT union, the biggest strike action in Tunisia for five years.

Thousands took to the streets in cities including Sfax, Gabes, Sidi Bouzid and Kasserine.

“I can’t pay for my sons’ food and studies out of a 900 dinar ($309) salary,” said 50-year-old teacher Nafisa who was protesting outside the parliament. “I can’t pay back my bank loans.”

Under pressure from the International Monetary Fund (IMF) and a deepening political crisis, Prime Minister Youssef Chahed is battling to cut the budget deficit to about 4.9 percent of gross domestic product (GDP) this year from 6.2 percent last year.

His unpopular reforms include cuts to the public sector, state companies and fuel subsidies.

PM Chahed views the cuts to public sector salaries as necessary to keep IMF funds flowing [Zoubeir Souissi/Reuters]

Tunisia’s economy has been in turmoil since autocrat Zine al-Abidine Ben Ali was toppled in a 2011 uprising sparked by anger at unemployment and poverty.

Nourredine Taboubi, head of the UGTT, said negotiations failed because “the sovereign decision is not in the hands of the government, but of the IMF”.

The government says it does not have the money to pay for the increase the workers want which would cost around 2bn Tunisian dinars ($690m).

“If Chahed was looking for populism or electoral interests, he would have signed for the wage increases, but we want to know who will finance salary increases,” government spokesperson Iyad Dahmani said.

He added that international lenders and the IMF threatened to stop financing Tunisia in the absence of reforms.

The government aims to cut the public sector wage bill to 12.5 percent of GDP in 2020 from the current 15.5 percent, one of the world’s highest in proportion to GDP.

The public sector wage bill has doubled to about 16bn dinars ($5.5bn) in 2018 from 7.6bn in 2010.

The state Institute of Strategic Studies says real purchasing power has fallen by 40 percent since 2014.

Tunisia struck a deal struck with the IMF in December 2016 for a loan programme worth around $2.8bn to overhaul its ailing economy with steps to cut chronic deficits and trim bloated public services, but progress has been slow.