Tunisia: Economic and Political Overview
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Tunisia was deeply impacted by the Jasmine Revolution of 2011 that ousted president Zine El Abidine Ben Ali, and the country has never recovered economically. The situation was exacerbated by the health crisis triggered by the COVID-19 pandemic and by the political crises that the country has been experiencing in recent years. According to IMF estimates, economic growth stood at 2.2% in 2022, as the war in Ukraine and rising international commodity prices worsened the existing vulnerabilities of Tunisia’s economy, contributing to a sharp increase in the trade deficit. For 2023, the IMF expects growth to further decelerate to 1.6%, before picking up marginally in 2024 (2.1%).
Tunisia received financial assistance from several international organizations, such as the African Development Bank, the IMF, and the European Union (which disbursed EUR 600 million in loans under the Macro-Financial Assistance emergency support programme). In October 2022, the IMF and the Tunisian authorities have reached a staff-level agreement to support Tunisia's economic policies with a 48-month arrangement under the Extended Fund Facility of about USD 1.9 billion, in an effort to restore Tunisia’s external and fiscal stability. In fact, the country's public finances have suffered in recent years, with the government deficit reaching 6.8% of GDP in 2022 also due to subsidy spending for energy and food (that accounted for 2.8% and 0.4% of GDP respectively, according to the World Bank). Similarly, the debt-to-GDP ratio rose to 88.8% (from 81.8% one year earlier) and is expected to increase marginally in 2023, to 89.2% as per the IMF forecast. The majority of the high external debt is public or public-guaranteed, which may cause doubts about the country’s ability to service its debt. Inflationary pressures increased significantly, mainly from global markets and higher administered prices, resulting in an overall rate of 8.1% in 2022. The Central Bank of Tunisia raised its policy rate by 75 basis points by the end of the year, to 8%, in its third increase of 2022; nevertheless, the IMF expects the inflation rate to remain high over the forecast horizon, at 8.5% this year and 7.9% in 2024. The pressure on the dinar against the dollar increased but the level of foreign exchange reserves has remained stable. Among the policies necessary to restore macroeconomic stability the IMF points to a conscientious reduction of the fiscal deficit through equitable taxation reform, strict control over the public sector wage bill, better-targeted subsidies, and deep reforms of state-owned enterprises.
Tunisia is afflicted by increasing economic disparities that favour its coastal regions, which account for more than 80% of urban areas and 90% of overall employment. The highest poverty rates are concentrated in rural areas, especially those in the northwest and southwest of the country (often exceeding 33%). Contrarily, the greater Tunis area shows the lowest values (Carnegie). According to the latest figures from the National Statistics Institute (INS), as of Q3/2022, the unemployment rate stood at 15.3%; nevertheless, youth unemployment – at 37.8% - was particularly high.
| Main Indicators | 2020 | 2021 | 2022 (E) | 2023 (E) | 2024 (E) |
| GDP (billions USD) | 42.54 | 46.69 | 46.60 | 49.82 | 51.53 |
| GDP (Constant Prices, Annual % Change) | -8.8 | 4.4 | 2.5 | 1.3 | 1.9 |
| GDP per Capita (USD) | 3,574 | 3,885 | 3,842 | 4,072 | 4,177 |
| General Government Balance (in % of GDP) | -7.2 | -6.5 | -7.2 | -4.6 | -3.8 |
| General Government Gross Debt (in % of GDP) | 77.6 | 79.9 | 79.4 | 80.0 | 79.1 |
| Inflation Rate (%) | 5.6 | 5.7 | 8.3 | 10.9 | 9.5 |
| Unemployment Rate (% of the Labour Force) | 17.4 | 16.2 | 0.0 | 0.0 | 0.0 |
| Current Account (billions USD) | -2.51 | -2.78 | -3.98 | -3.55 | -2.92 |
| Current Account (in % of GDP) | -5.9 | -6.0 | -8.6 | -7.1 | -5.7 |
Source: IMF – World Economic Outlook Database, October 2021
Agriculture is a key sector of the Tunisian economy, accounting for 10.1% of GDP and employing 14% of the workforce (World Bank, latest data available). The country has 9.7 million ha of agricultural land, equivalent to 62% of its total land area (FAO). An improvement in production methods in recent years has allowed the sector to develop and modernise (cultivation of olive trees, fruit trees and palm trees) while enabling the country to reach a level of food sufficiency. Organic farming is also booming, with Tunisia being one of the most productive countries in Africa. Olive oil accounts for the largest share of agricultural exports, followed by dates, olives and fresh fruits. According to the latest figures from the National Observatory for Agriculture, the value added of the agricultural sector increased by 2% year-on-year in the second quarter of 2022, following a 3.3% increase recorded in the first quarter.
Industry represents 23.1% of the GDP and employs 33% of the active population. The country's industrial sectors are predominantly export-oriented. Among sectors in decline, there are the leather and shoe industry, paper, cardboard, plastic, and wood. The chemicals and textiles and clothing sectors had been growing in recent years; however, the economic crisis triggered by the Covid-19 pandemic impacted especially the textile and clothing sector and the mechanical and electrical engineering sub-sectors, which are still recovering. Overall, the manufacturing sector is estimated to account for 14% of GDP (World Bank). According to the latest figures from the National Statistical Institute, in Q3/2022, industrial production fell by 1.2% compared to the previous quarter, due to the decline recorded in the manufacturing (-0.5%) and in the mining and quarrying industries (-4.8%). Production was also down in the energy sector (-3%), the agricultural and food industries (-4.6%), mining (-15.9%), and the oil refining sector (-7.5%).
The local economy is largely orientated towards services, which account for 60.1% of the GDP, including the booming sectors of ICT (information and communication technologies) and tourism. Professional training and research are both rising sectors. The services sector as a whole employs 53% of the country's workforce. The tourism industry is also important to the country’s economy: after suffering from the international restrictions imposed during the COVID-19 pandemic, it showed signs of recovery in 2022 when Tunisia received 6.12 million tourists, marking a sharp increase of 159% compared to the previous year. Nevertheless, tourist arrivals were still 32% lower than in 2019, when the country welcomed a record 9.43 million tourists (data by the National Tourism Office).
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Employment By Sector (in % of Total Employment) | 13.8 | 33.5 | 52.8 |
| Value Added (in % of GDP) | 10.1 | 23.1 | 60.1 |
| Value Added (Annual % Change) | -2.5 | 8.6 | 4.0 |
Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.
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Latest Update: September 2023
