TUNIS, Tunisia — Tunisia's Islamist prime minister announced his resignation Thursday in favor of a caretaker government that will supervise new elections later this year.
The resignation of Ali Larayedh and the dissolution of his coalition government represent an admission of defeat for the Ennahda Party that won elections in 2011 but has since struggled to guide the country through its perilous transition to democracy.
As a sign of the challenges facing the next government, several cities around this North African nation of 10 million have been wracked by protests this week over high inflation, lack of jobs and new taxes in the budget as the government struggles with an ongoing fiscal crisis.
In one of his final statements, Larayedh said the taxes on transportation that had provoked the demonstrations had been suspended.
Mehdi Jomaa, an engineer and the former industry minister, has been selected to replace Larayedh and is expected to present his new cabinet later Thursday.
"As we promised, once the vision was clear and the country was on the right track, I presented my resignation to the President Moncef Marzouki," Larayedh told reporters. He lauded the Constitutional Assembly for appointing a new commission to oversee elections. Its members comprise two judges, a lawyer, a university professor and experts in finance and IT.
The decision by Ennahda, which ruled in coalition with two other secular parties, to step down ended a months-long political standoff.
In the midst of a mounting economic crisis, social upheaval and the assassination of two left-wing politicians, the opposition had demanded, and eventually received, a caretaker government to hold new elections.
The new constitution is expected to be voted on next week and planning will begin for new elections.
Tunisia's revolution inspired similar uprisings across the Arab world, but in the aftermath of the so-called Arab Spring, the transitions to democracy have stumbled.
Tunisia has seen a rise in extremism and terrorist attacks blamed on shadowy Islamist groups, as well as waves of demonstrations over unmet social expectations amid a faltering economy.
Islamists dominated the elections in 2011 but they have since seen their popularity diminish in the face of the country's persistent problems. Polls, however, still show Ennahda as one of the most powerful parties in the country.
Despite the difficulty of the transition, the different political players ultimately showed a willingness to negotiate and compromise that was absent in other Arab Spring countries, allowing problems to be resolved.
The assembly will vote Thursday on which member will preside over the commission and is expected to choose university professor Chafik Sarsar, according to the state news agency.