The Central Bank of Tunisia (BCT) has yet to release its 2023 report on economic, financial, and monetary developments. However, it has recently published the Business Conditions Periodical for the first half of 2024, providing insights into the state of Tunisia’s industrial sector and broader economic landscape.
Decline in Industrial Output
The first half of 2024 has been marked by a notable decline in the output of Tunisia’s exporting manufacturing industries. This trend mirrors the downturn in the euro area’s manufacturing sector, driven by reduced demand. Additionally, the extractive industries have underperformed.
Specifically, textile production has contracted, while the growth in imports of production inputs has slowed.
Exports of machinery and equipment saw only a marginal increase of 0.4%, a sharp decline from the previous year’s 18.6% rise. Textile, clothing, and leather exports dropped by 9.2%, contrasting with a 13.7% increase in the prior year.
Furthermore, exports of mining, phosphate, and derivative products plummeted by 30.4%, compared to a decrease of 3.4% at the end of June 2023.
Conversely, the agro-food sector experienced substantial growth in exports, rising by 45.7% due to improved agricultural production, up from 9.3% in the previous year.
Imports of raw materials and semi-finished products also decreased by 5.3%, although capital goods imports grew modestly by 1.1%, down from 4.8% last year.
Energy sector struggles
The energy sector has faced a widening deficit, increasing from 4,891.8 million dinars (MD) to 5,794.1 MD. This deterioration is attributed to a surge in imports (up 17.5%) following a decline in national hydrocarbon production, despite a recovery in energy exports (+14.6%).
The gross domestic product (GDP) to energy trade deficit ratio slightly worsened, reaching 23.8% by the end of June 2024.
Tourism trends
Tourism activity has shown mixed results. The number of foreign tourists rose by 4% to 3.4 million visitors, with European arrivals growing at a slower pace compared to previous years.
French and German tourist numbers increased by only 8.9% and 6.9%, respectively, a significant slowdown from earlier gains. Tourism from the Maghreb region fell by 3.2%, despite an increase in Algerian visitors.
Despite the modest growth in tourist arrivals, overnight stays rose by 7.3% to 8.8 million units, and tourism receipts improved by 6.6%, reaching 2,801.1 MD.
Excluding currency effects, receipts increased by 5.5%. Air passenger traffic grew more slowly at 13.1% compared to 33.5% the previous year.
Agricultural sector resilience
The agricultural sector has shown resilience, with a 0.6% growth in GDP in the first half of 2024. However, this growth remains uncertain and heavily dependent on climatic conditions.
The National Institute of Statistics (INS) notes that Tunisia’s GDP has yet to recover to pre-health crisis levels from the end of 2019.
While agricultural activity has rebounded, the industrial sector continues to face challenges, underscoring its critical role in job creation.
Overall, the Tunisian economy is navigating a complex landscape with significant fluctuations in industrial output, energy deficits, and varying tourism and agricultural performance.
