Riots over Tunisia's economy have flared in towns around the country, leaving one dead and posing an immediate challenge to the new prime minister and the country's path to democracy.

Crowds protested late on Friday in the capital Tunis outside the government finance buildings in the low-income neighbourhood of Ettaddamon over new taxes levied by the outgoing government described as necessary to fill yawning holes in the country's budget. 

The tax hikes were hastily suspended by the outgoing prime minister, but the decision failed to calm protesters.

Police reported that local criminals took advantage and began looting stores and clashing with authorities. They were dispersed with tear gas, Interior Ministry spokesman Mohamed Ali Aroui said on Saturday.

I will do everything in my power to confront the challenges, overcome the obstacles and restore stability and security to Tunisia.

Mehdi Jomaa, Tunisia's new prime minister

Nearly 50 people were arrested in clashes in suburbs of Tunis, Aroui said.

Protesters also clashed with police in the upscale La Marsa area of Tunis when they tried to storm a police station.

In another clash, an 18-year-old man was killed and a customs agent injured in the town of Bouchebka on the Algerian border, Aroui said. He said an investigation is under way into what happened.

The customs officer was taken to hospital in Tebessa in Algeria, Aroui said.

"Security posts are targeted by troublemakers, and what happened is very dangerous, and it gives an insight into the depth of criminality in Tunisia," he said, calling on civil society groups and political groups to back the security forces.

The violence came hours after prime minister-designate Mehdi Jomaa was tasked with forming a cabinet of independents to end a crisis triggered by the killing of an opposition politician last July.

Economic hardships 

"I will do everything in my power to confront the challenges, overcome the obstacles and restore stability and security to Tunisia," the new prime minister told reporters after the swearing-in.

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The outgoing government had levied new taxes to confront massive budget deficit, prompting protests around the country on Wednesday.

Since Tunisia's 2011 revolution, the economy has suffered, fuelling social unrest. 

Strikes and protests started in the southern and central towns of Kasserine, Thala and Gafsa last Tuesday and spilled over into Tunis, after calls from transport and agricultural unions against the reforms.

The 2014 budget sets out new taxes to help the government increase public finances,a demand from international lenders which want the government to reduce the country's budget deficit and control public subsidies.

After the economy shrank 2 percent in 2011, growth returned at 2.7 percent in 2013, but that is far below the level needed to create jobs. Unemployment hovers at 17 percent.

Source: Agencies