US Secretary of State Anthony Blinken warned Wednesday that Tunisia urgently needs to reach an agreement with the International Monetary Fund, after the European Union expressed concern about the deteriorating political and economic situation in this country.

"The most important thing they can do in Tunisia from an economic point of view is to reach an agreement with the International Monetary Fund," Blinken said in response to a question about Tunisia during a hearing of the US Senate Foreign Relations Committee.

"We strongly encourage them to do so because the economy may be heading into the unknown," he added.

Tunisia is struggling under mounting debt and price hikes exacerbated by Russia's invasion of Ukraine.

It reached a tentative agreement in October for a new loan from the International Monetary Fund of about $2 billion.

The World Bank sought to ensure reforms in Tunisia, and recently expressed its concern about a series of racist attitudes against the backdrop of statements by President Kais Saied in which he criticized the large presence of illegal immigrants in his country and talked about a conspiracy to change the "demographic composition" in the country.

On Monday, European Union foreign policy chief Josep Borrell announced that the bloc is concerned about the deteriorating political and economic situation in Tunisia and fears its collapse.

"If Tunisia collapses, it threatens an influx of migrants towards the European Union and causing instability in the Middle East and North Africa region. We want to avoid this situation," he said.

On Tuesday, the Tunisian Foreign Ministry expressed its rejection of Borrell's statements, considering them "exaggerated."

Blinken also expressed his concerns about the political transformation of Tunisia under Said, who has monopolized all powers since July 25, 2021.

The opposition accused Saeed of carrying out a coup in the country from which the Arab Spring was launched a decade ago.