Growth could rebound to 2.5% in 2024 on the back of a strong tourism sector, phosphate sales and an agreement with the International Monetary Fund (IMF), according to a report published on Wednesday by the European Bank for Reconstruction and Development (EBRD).
However, the EBRD said Tunisia’s economic growth is expected to average 1.9% in 2023, down from a modest post-pandemic recovery of 2.4% in 2022, as adverse external conditions, high inflation and social unrest weigh on the economic outlook.
“Despite an expansion in tourism, financial services and the industrial sector, the slowdown is driven by a contraction in agriculture and mining,” the bank said.
Unemployment fell slightly to 15.6% in the second quarter of 2023, but inflation reached 9.1% year-on-year in July 2023. The macro-fiscal situation deteriorated in 2022, with increased government spending (especially the wage bill and subsidies) leading to a budget deficit of 7.6% of GDP, while public debt reached 80% of GDP in 2022.
As a result, the country was downgraded by rating agencies in 2022 and 2023, while agreement on an IMF-supported program was further delayed, the bank added.
