Tunisia’s new government faces an economic situation that is highly vulnerable to a deterioration of the global economy due to the coronavirus pandemic and volatile oil prices, the World Bank (WB) said on Thursday.
Tunisia has high twin deficits and debt, and limited buffers, whereas growth is anemic, employment stagnant, and inflation relatively high, the bank Thursday said in its latest MENA economic update.
A worsening pandemic would negatively impact tourism, exports and domestic demand and consequently growth, employment, and household vulnerability, reads the update entitled “How Transparency Can Help the Middle East and North Africa.” A sharp reversal of recent oil price dynamics would exacerbate current account and fiscal pressures.
The update tackled the dual shocks from the COVID-19 (Coronavirus) pandemic and the collapse in oil prices.
The COVID-19 pandemic is affecting MENA economies across four channels: the deterioration of public health, falling global demand for the region’s goods and services, declines in MENA’s domestic supply and demand because of social distancing measures and falling oil prices, the WB further said.