In its 2009 Report on Tunisia Oxford Business Group says that amidst the turbulent background of the global economic crisis,” 2008 has turned out to be a surprisingly robust year for the Tunisian economy”. Given the measured and steady manner in which the country tends to implement fundamental economic reforms, the year has seen a significant amount of progress towards greater privatisation and liberalisation.
Reviewing Tunisia performance, the report pointed out that on a macroeconomic level, Tunisia has posted healthy growth numbers whilst managing to keep a lid on inflation. GDP growth in 2008 averaged 5.1% – lower than 2007’s 6.3%, but a strong showing nonetheless, particularly given the slowdown in the Eurozone, Tunisia’s largest trading bloc. Furthermore, in spite of massive rises in commodity prices – from building materials to foodstuffs – inflation came in at a modest 5%, compared to record rates in excess of 12% in other regional countries such as Egypt or Jordan.
The report also highlights the” impressive numbers for 2008” posted by domestic banking sector, which has faced a number of hurdles in recent years and a volatile international environment.
Traditionally, the Tunisian banking sector has had to deal with a large non-performing loans (NPL) portfolio, and with some 43 financial institutions involved, the sector also suffers from over-fragmentation. However, the fundamentals look to be steadily improving.
The Poulina IPO introduction to the BVMT in late March, and that of Artes, an automotive distribution group which released 39% of its capital onto the local market have helped buoy the BVMT’s performance over the past year, with the Tunindex market index showing strong year-on-year growth of over 13% by the beginning of December.
Oxford Business Group underlined the” government’s drive to move Tunisia to a knowledge-based economy» adding that, the level of penetration and sophistication of the telecoms and IT sectors has been rapidly improving as well. Tunisia was ranked 35th by the World Economic Forum in its 2008 Global Information Technology Report – which assesses ICT readiness, accessibility and regulation – coming in second in the Middle East and North Africa region after the United Arab Emirates, and well in advance of other regional players such as Jordan (47th) and Morocco (74th).
Tunisia’s more traditional industries have also been showing strong growth. In spite of the slowdown in its European markets, tourism, one of Tunisia’s key economic sectors and the country’s second largest employer after agriculture, has grown steadily over the first nine months of 2008, with record revenues expected by the end of the year.
Tourism revenues upward
Official figures released in October showed that Tunisia’s tourism revenues rose by 9% year-on-year to approximately $1.8bn for the first nine months of 2008. By the end of the year, taking into account seasonal changes in demand, the government expects visitor numbers to reach 7m and tourism revenues to increase by a total of 8% to a record $2.4bn.
The physical appearance of the country is changing rapidly as well, with a set of colossal real estate and infrastructure projects in the works. Sama Dubai received state approval for the company’s massive $25bn “Mediterranean Gate” retail, residential and commercial project on the shores of Lac Sud. Across the city, Emirati developer Bukhatir has begun construction on the $5bn Tunis Sports City, a mixed-use development along La Marsa highway in the northern suburbs of Tunis, scheduled for completion in 2015. Nearby, Abu Dhabi-based Al Maabar has also announced plans for Bled El Ward, a $10bn, 5000-ha development on the northern outskirts of Tunis, while Bahrain’s Gulf Finance House is similarly moving forward on its $3bn Tunis Financial Harbour project.
In spite of continued global economic uncertainty, the Tunisian government is expecting 2009 to shape up to be an equally fruitful year. In the recently released 2009 budget, the government has increased its spending plans by 12% to over $12bn, on the back of $1.75bn in foreign investment flows and a GDP growth rate of 5%. The inflation rate is predicted to drop to a more manageable 3.5%, as plans for further privatisation and liberalisation move forward.
Additionally, Tunisia’s infrastructure is getting a big lift, with a new $700m airport and $2bn deepwater port in nearby Enfidha, both of which will help increase the republic’s transit links with neighbouring countries. Work has also begun on a new regional railway network as well as on numerous roads, hotels and tourist resorts along the Mediterranean coast.