Building capacity to help Africa trade better

Tunisia

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Tunisia

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Tunisia

Key Facts

  • Capital: Tunis
  • Region: North Africa
  • Official languages: Arabic
  • Independence Day: March 20, 1956
  • Area: 163,610 sq km
  • Population (2018): 11.6 million
  • REC membership: AMU, CEN-SADC
  • WTO membership: March 29, 1995
  • GDP (2018): US$ 39.871 billion
  • GNI per capita (2018): US$ 3 500
  • Currency: Tunisian dinar

Economic overview

Real GDP growth slowed to 1.5% in 2019 following two years of rebounds. Growth in the agriculture and fishing sectors slumped to 1.7% in 2019 from 9.8% in 2018. Growth was spurred primarily by tourism and financial services and, on the demand side, by private consumption.

The fiscal deficit improved slightly to 3.9% in 2019, from 4.6% in 2018. The current account deficit was 10% of GDP in 2019 and is projected to stay fairly high at 9.9% in 2020 and 8.4% in 2021. Despite the central bank policy of raising interest rates since 2017, inflation remained at 7.1% in 2019 – and is projected to moderate to 6.7% in 2020 and 6.1% in 2021.

Unemployment was 15.3% during the first quarter of 2019 but has dropped slightly as the decline in unemployment among graduates continued. Unemployment among people ages 15 to 24 is 34.3%. The poverty rate, which dropped from 20.5% in 2010 to 15.2% in 2016, increased by 30% from 2014 to 2018 due to increased living costs, according to the Center for Economic and Social Research. The Nord-Ouest region has been particularly affected with a poverty rate of 28.4% against 5.3% for the Greater Tunis region.

Continuing inequalities are destabilizing the social climate and impeding investment and growth. Reducing them implies accelerating the structural reforms initiated since 2011 and introducing specific measures aimed at more inclusive growth. Public spending needs prioritizing and better targeting to spearhead the economy.

Real GDP growth should recover to 2.1% in 2020 and 2.6% in 2021, spurred on the supply side by agriculture, phosphates, and tourism sectors. The nominal appreciation of the dinar to the euro (9%) and the dollar (5.8%) in the first quarter of 2019 should reduce the cost of energy imports (38.6% of total import costs) and the current account deficit.

Tunisia has many strengths, including proximity to Europe, qualified labor, diverse industries (aeronautics, chemicals, textiles), high agricultural and fishery potential, and sizable deposits of phosphates, oil, and gas. The tourism industry (beach, business, mountain, oasis, eco-tourism, and seawater therapy) was until 2011 a significant source of growth and employment. In the medium term, it will benefit from the steady 5% growth in the global demand for tourism services.

The wide social and regional disparities brought to light in January 2011 have not narrowed. In 2019, unemployment remained high among college graduates, with large differences between coastal and interior regions. Women are more than twice as likely to be unemployed than men.

Public spending has increased significantly since 2011, prioritizing current expenditures over capital expenditures. This increase has been financed primarily by external borrowing. Public debt, the majority external (70%), increased by 95% between 2010 and 2019, placing Tunisia at risk of serious shocks and reducing liquidity available to the private sector.

Last updated: April 2020

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