By Tarek Amara
TUNIS (Reuters) - Tunisia's powerful UGTT union called another national strike for January to press its demand for higher wages after the government said on Saturday it would seek a realistic pay deal.
About 650,000 public sector workers went on strike and thousands joined protests across Tunisia on Thursday over the government's refusal to raise wages amid threats from international lenders to stop financing Tunisia's tattered economy.
Raising the pressure on the government the UGTT approved plans for a nationwide strike that include public employees and state companies on Jan. 17.
Prime Minister Youssef Chahed conceded that pay was an issue but added that any agreement must take into account the public finances.
"There is a real problem in the decline in purchasing power and high inflation and the decline of public services.. These will be our priorities in the next period," Chahed told parliament.
The government had said it does not have the money to pay for the increases strikers want, worth about 2 billion Tunisian dinars ($690 million) in total.
Under pressure from the International Monetary Fund (IMF) and a deepening political crisis, Chahed is battling to cut the budget deficit to about 4.9 percent of GDP this year and 3.9 percent in 2019 from 6.2 percent last year.
His unpopular reforms include cuts to the public sector, state companies and fuel subsidies.
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 and record levels of inflation.
The state Institute of Strategic Studies says real purchasing power has fallen by 40 percent since 2014.
(Reporting By Tarek Amara; Editing by Keith Weir)