As part of broader reforms, Tunisia’s government is seeking to curb the large losses incurred by major state-owned companies, which past year amounted to about $1.5 billion.
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His warning to parliament came as lawmakers were about to vote on whether to accept his new cabinet.
Tunisia’s new Prime Minister Youssef Chahed and outgoing PM Habib Essid exchange documents during the handing-over ceremony in Carthage on August 29, 2016.
Tunisia’s new Prime Minister Youssef Chahed and members of his cabinet were sworn in, the presidency said, after approval from parliament.
Chahed will be the youngest Prime Minister since the independence of Tunisia from France in 1956. “Our youth have lost hope, the trust of citizens in the state has decreased”, he said.
“If nothing changes by 2017 austerity will follow”, he warned, affirming that his government would give priority to fighting corruption and “terrorism”.
The 41-year-old Chahed, a member of the president’s Nida Tounes party, was appointed after last month’s collapse of the previous government.
A wave of jihadist attacks, including two deadly assaults past year that killed dozens of foreign tourists, has further exacerbated problems in the economy, which relies heavily on tourism revenues.
Lawmakers were meeting on Friday to vote whether to approve Chahed’s new government – a broad coalition of secular, Islamist and leftist parties, independents and trade union allies which he believes can deliver on economic reforms.
Many Tunisians have welcomed the nomination of a comparatively young premier – especially compared with other leaders since 2011.
The North African state has been struggling to cope with unemployment that has worsened since the 2011 “Jasmine Revolution” when president Zine al-Abidine Ben Ali was ousted.
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Chahed, who becomes the seventh prime minister of Tunisia in less than six years, pledged to overcome challenges facing the country.
