Tunisia’s economic growth should rebound to 3.5% in 2022 and decelerate to 3.3% in 2023 against 2.9% in 2021, according to the latest Global Economic Prospects published by the World Bank Tuesday.
In Tunisia, an acceleration in COVID-19 cases, increased restrictions on mobility, and political uncertainty throttled the rebound in 2021, the document pointed out, estimating that the high level of debt could slow down economic activity in the country.
Indeed, high debt levels undermine the effectiveness and ability to implement necessary countercyclical policy, the ability to increase investment in human and physical capital, and private sector confidence.
Growth in the Middle East and North Africa (MENA) region is forecast to accelerate to 4.4 percent in 2022, reflecting tapering oil production cuts and accelerating vaccine progress, before slowing to 3.4 percent in 2023.
Output in 2023 is projected to remain about 5 percent smaller than expected before the pandemic. Growth prospects are uneven across the region, with risks to the outlook predominately to the downside.
The regional outlook is subject to risks from changes to oil prices with gains and losses accruing differently to oil importers and exporters.
However, Gains to oil exporters are not guaranteed, as underinvestment may limit scope to take advantage of high oil prices or already-high global energy prices may undermine further global demand and generate spillovers.
The rapid spread of Omicron may undermine global demand and lead to a retrenchment in oil prices.
Moreover, climate change is increasing risks to lives and livelihoods in MENA, with the number of natural disasters—including heatwaves and floods— having already become more frequent in recent decades, the same document warned.
Over time, rising temperatures would reduce growing areas for agriculture and yields, and exacerbate already-scarce water resources, undermining food security, forcing migration, lowering labor productivity, and raising the likelihood of conflict.