UPDATE 1-Tunisia to raise private sector minimum wage by 6 percent

Mon Jun 23, 2014 9:14am EDT

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(Adds background, further comment from Ghariani)

TUNIS, June 23 (Reuters) - Tunisia is set increase the minimum wage for about 1.5 million private sector workers for the first time since 2012, the country's Chambers of Commerce and Industry said on Monday.

The deal could help ease social tensions ahead of elections this year and reduce strikes that the chambers of commerce and government say have led about 200 local and foreign companies to quit the country since former President Zine El Abidine Ben Ali was ousted three years ago.

"We will sign later on Monday with the labor union UGTT and the government an agreement to increase minimum wages by 6 percent for the private sector," said Khalil Ghariani, a member of chambers of commerce and industry.

He said the deal, to be signed on Monday at the Prime Minister's office had been struck even though economic conditions remain difficult. It comes after talks earlier this year between the caretaker government and the powerful UGTT labor union federation.

Tunisia's budget deficit is set to grow to 8 percent of gross domestic product this year, mostly due to public worker wage costs and subsidies which remain from Ben Ali's rule.

The government is seeking a way to cut spending without triggering the kind of discontent that toppled Ben Ali, whose overthrow was caused partly by grievances over unemployment and high living costs.

Tunisia's economy is forecast to grow by 3 percent in 2014.

The election authority has proposed to hold a parliamentary election on October 26 and the first round of presidential polls a month later, marking the final step towards full democracy in the cradle of the 2011 Arab Spring uprisings.

(Reporting by Tarek Amara; Editing by Catherine Evans)

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