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Tuesday 22 June 2021
HomeNewsTunisia: OECD believes economy is recovering, but reforms will be needed

Tunisia: OECD believes economy is recovering, but reforms will be needed

The Tunisian economy is recovering, driven by good harvests and strong performance in the tourism sector, but further reforms are needed to ensure sustainable growth and higher living standards for all Tunisians, according to a new report from the OECD.

The Survey, presented in Tunis by OECD Acting Chief Economist Alvaro Pereira and Tunisia’s Minister of Investment, Development and International Co-operation Zied Laâdhari, projects growth approaching 3% in 2018 and 3½% in 2019.

“Democracy has made strides, a number of well-being indicators are satisfactory, the poverty rate has dropped significantly and is rather low, exports are promising and the standard of living is comparable to that of other emerging countries »

“The Tunisian economy has shown great resilience to both internal and external challenges,” Mr. Pereira said.

“Reinforcing today’s economic recovery will require a quicker pace of reforms, with priority given to actions to improve the business environment. Job creation and regional development will be the keys to making the economy more efficient and more inclusive,” Mr Pereira added.

The OECD survey also pointed out that returning public debt to a more sustainable path will require a combination of gradual fiscal stabilization and structural reforms capable of sustaining stronger growth. Tunisia’s tax-to-GDP ratio is already high, fiscal consolidation should focus on reducing public spending – including salaries and pension costs – over a medium-term horizon.

“Tax justice can be reinforced through better efforts to combat tax evasion and fraud and the withdrawal of subsidies offered to wealthy households. Reinforcing the governance of state-owned enterprises and improving their financial performances will contribute to both stronger public finances and more efficient economy,” said the same source.

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