In its latest paid-for report, entitled “Tunisia Country Risk Report”, BMI, a subsidiary of Fitch Rating, predicts that “a rebounding agricultural sector and stronger tourism activity will drive Tunisia’s real GDP growth from 0.6% y-o-y in H1 2024 to 2.0% y-o-y in H2 2024.”
GDP at 0.7% in 2025
And while official Tunisian statements on growth for 2025 are rife with figures ranging from 1 to over 3, BMI predicts that “growth will then slow to 1.0% in 2025, as tax hikes will further weaken households’ purchasing power and discourage investment, amplifying the adverse impact of the prevailing structural fiscal and external problems on the economy.”
For Tunisia in 2025, BMI also forecasts “a narrowing of Tunisia’s current account surplus from 2.2% of GDP in 2023 to 1.3% of GDP in 2024 and to 0.7% of GDP in 2025.” It estimates that “a narrower current account deficit, foreign support mainly from EU and solid FX reserves will allow the authorities meet their more than USD2.0bn FX obligations in 2025.”
The Central Bank of Tunisia (CBT) will hold the policy rate at 8.00% and the Tunisian Dinar will trade sideways to stronger in line with the US dollar
According to the same source, “Tunisia’s fiscal deficit will also narrow gradually from 7.2% of GDP in 2023 to 5.7% of GDP in 2025 on higher tax revenues and lower spending on subsidies.”
Still on the subject of forecasts for 2025, BMI estimates that “the Dinar will move sideways, or even stronger, in line with the US dollar and due to the support of the authorities’ and that ‘depreciation pressure on the dinar will increase in the first half of 2025.”.
According to the same analysts, “the CBT will hold the policy rate at 8.00% until the end of 2025, as inflation will decelerate only slightly from 6.5% y-o-y in December 2024 to 6.0% y-o-y in December 2025.”
Finally, BMI, which will not be heard by anyone in a government obsessed with chasing the Dinar and thinking only in the very short term, warns that “President Kais Saied’s ongoing rejection of reforms, increased reliance on domestic funding and tax hikes risk further deteriorating socio-economic conditions.”
It is the subsidiary of Fitch, which last September upgraded Tunisia’s sovereign rating to ‘CCC+’ and considered ‘the likelihood of social tensions to be low’ that now says otherwise!
