Economic growth in Tunisia is expected to pick up from 1.2 per cent in 2024 to 1.8 per cent in 2025 and 2.2 per cent in 2026 as fiscal consolidation continues alongside recovery in exports and tourism receipts, according to the latest “Regional Economic Prospects” report by the European Bank for Reconstruction and Development (EBRD).
In a statement released Thursday, the EBRD estimates that the fiscal deficit is expected to improve to 6.3 per cent of GDP in 2025, supported by enhanced revenue mobilization and lower basic goods subsidies. “A medium-term fiscal consolidation plan targets a deficit of 5.5 per cent of GDP and a wage bill of 13.3 per cent of GDP.”
Public debt remains high at 82.2 per cent of GDP but is expected to drop to 80.5 per cent in 2025 reflecting fiscal consolidation efforts. Around half of debt is external, down from more than 70 per cent in 2019.
“Tunisia’s external position has improved but remains vulnerable to major shocks,” the EBRD further observed in its report, which also reviews the economic outlook for Egypt, Jordan, Morocco, and Lebanon.
Foreign exchange reserves cover 3.7 months of imports
Still regarding Tunisia, the current account deficit stood at 1.6% of GDP from January to November 2024, down from 2.3% during the same period the previous year.
“This reflects a contraction in imports due to lower commodity prices and growth in exports driven by mechanical and electrical products, as well as olive oil,” explains the EBRD report.
It adds that foreign exchange reserves remained stable at $25 billion in November 2024, covering 3.7 months of imports.
On inflation, the report indicates that it averaged 7.1% between January and November 2024, compared to 9.5% during the same period in 2023, while unemployment slightly increased to 16% in the second quarter of 2024.
Regional outlook: Growth acceleration expected in Southern and Eastern Mediterranean
For the Southern and Eastern Mediterranean region, the EBRD forecasts an acceleration in growth to 3.7% in 2025, up from 2.5% in 2024. Average growth is expected to rise slightly to 4.1% in 2026. However, uncertainty surrounding global trade rules weighs on investment and production.
“Recovery began at the end of 2024, following a period of largely moderate growth due to prolonged regional instability and a sharp contraction in production in Lebanon following the war with Israel,” the report states.
Despite positive prospects for the next two years, significant downside risks remain, such as the resumption of wars, uncertainty surrounding foreign aid and tariff policies, as well as climate-related shocks, the EBRD concludes in its analysis.
