TUNIS (Reuters) - Tunisia's parliament approved the appointment of Elyess Fakhfakh as finance minister on Thursday after President Moncef Marzouki called for a new cabinet following violent protests last month by Tunisians demanding more jobs.

Fakhfakh, who is the minister of tourism and a former businessman, faces a number of challenges as the Tunisian economy's recovery after the uprising that overthrew veteran ruler Zain al-Abidine Ben Ali in January 2011, is fragile.

The economy shrank 2.2 percent last year and though the government has forecast 3.5 percent growth this year the economy is being hampered by high unemployment of around 17 percent, declining trade with the crisis-hit euro zone and disputes between secularists and hardline Salafi Islamists over the future direction of the North African Arab state.

Violent protests erupted last month in the northwestern city of Siliana with Tunisians demanding more jobs.

Fakhfakh, 44, is the formal successor to Hussein Dimassi who resigned in July in protest at the sacking of the central bank governor and the government's plans to pay financial compensation to 20,000, mostly Islamist, former political prisoners.

The moderate Islamist-led coalition government, which came to power last October, has pledged banking and other reforms but policymaking has been held up by the resignation of Dimassi, and the sacking in July of central bank governor Mustafa Kamel Nabli over political differences with the government and over monetary policy.

The government has however recently secured loans including from the World Bank. Last month it said it could ask the International Monetary Fund for a $2.5 billion standby credit line.

The government expects the budget deficit to narrow to 6 percent of gross domestic product next year from an estimated 6.6 percent this year.

Interim finance minister Salim Besbes said last month that the government would issue Islamic bonds for the first time next year, to raise 1 billion Tunisian dinars ($646.25 million) to help finance infrastructure projects such as roads and hospitals.

Tensions between the government and the central bank which led to the sacking of Nabli centered around who had the last say on monetary policy after the government unveiled an inflation target.

Veteran economist Chadli Ayrai has replaced Nabli and has better relations with the government than his predecessor.

Fakhfakh will remain as minister of tourism temporarily while taking over the finance ministry, the government said in a statement.

($1 = 1.5474 Tunisian dinars)

(Reporting By Tarek Amara; Editing by Susan Fenton)