Tunisia: Economic and Political Overview

Economic Overview

Tunisia was deeply impacted by the Jasmine Revolution of 2011 that ousted President Zine El Abidine Ben Ali, and the country has never recovered economically ever since. The situation was exacerbated by the health crisis triggered by the COVID-19 pandemic and by the political crises that the country has been experiencing in recent years. After a moderate rebound in 2021 (4.3%) and in 2022 (2.7%), the economy stalled in 2023 (0% growth) and gained momentum in 2024 (+1.4% on an annual basis), although at a slower pace than that expected by the Central Bank. The country’s economic outlook remains muted in the short and medium term. Real GDP growth is forecast at 1.6% for 2025, while medium-term growth is expected to stay sluggish, averaging below 1.5% of GDP (IMF).

Despite lower commodity prices and reduced subsidy costs, public finances remained strained in 2024 amid stalled expenditure reforms and weak growth. The fiscal deficit fell to an estimated 6% of GDP in 2024 (from 6.7% in 2023) as subsidies and wages were contained, while tax revenues rose moderately. Public debt climbed to 83.7% of GDP in 2024 (from 67.8% in 2019), with gross financing needs rising to 16.1% of GDP, mainly due to external debt service. Limited access to international markets pushed authorities to rely more on domestic financing, as FDI—despite a 26.7% increase in early 2024—covered less than a quarter of external obligations. The budget remains rigid and exposed to external shocks. Fitch Ratings estimate payroll, interest, and subsidies will consume 87% of total revenue (excluding grants) in 2026, down from 95% in 2024. Subsidy costs remain sensitive to global price fluctuations. Tunisia’s inflation slowed to 7% in 2024, down from 9.3% in 2023, according to the National Institute of Statistics. The easing was driven by reduced pressure on food prices, though they still rose by 7.2% during the year. Manufactured goods prices rose 6.1%, driven by clothing and footwear (+9.7%) and cleaning products (+7.8%). Services inflation reached 5.4%, led by restaurants, cafes, and hotels at 11.7%. The IMF forecasts inflation to remain sticky over the forecast horizon, at 6.7%. Among the policies necessary to restore macroeconomic stability the IMF points to a conscientious reduction of the fiscal deficit through equitable taxation reform, strict control over the public sector wage bill, better-targeted subsidies, and deep reforms of state-owned enterprises.

Tunisia is afflicted by increasing economic disparities that favour its coastal regions, which account for more than 80% of urban areas and 90% of overall employment. The highest poverty rates are concentrated in rural areas, especially those in the northwest and southwest of the country (often exceeding 33%). Contrarily, the greater Tunis area shows the lowest values (Carnegie). Poverty at the Upper-Middle Income Poverty Line (USD 6.85/day in 2017 PPP) fell to 15.7% in 2024 (from 15.9% in 2023) and is projected to drop to 14.9% by 2026, according to the World Bank. According to the latest figures from the National Statistics Institute (INS), as of Q3/2024, the unemployment rate stood at 16%; nevertheless, youth unemployment – at 40.5% - was particularly high. By gender, the unemployment rate remains significantly higher for women (22.1%) than for men (13.3%).

Main Sectors of Industry

Agriculture is a key sector of the Tunisian economy, accounting for 9.5% of GDP and employing 13% of the workforce (World Bank, latest data available). The country has 9.7 million ha of agricultural land, equivalent to 62% of its total land area (FAO). An improvement in production methods in recent years has allowed the sector to develop and modernise (cultivation of olive trees, fruit trees and palm trees) while enabling the country to reach a level of food sufficiency. Organic farming is also booming, with Tunisia being one of the most productive countries in Africa. Olive oil accounts for the largest share of agricultural exports, followed by dates, olives and fresh fruits. Despite years of drought, Tunisia's agricultural exports grew in 2024. According to data from Onagri, revenue reached USD 2.6 billion, up 15.8% from USD 2.2 billion in 2023, driven by higher international prices despite stable export volumes. Olive oil exports brought in USD 1.5 billion, up 27%, while dates generated USD 299 million (+20%) and citrus USD 6.2 million (+55.5%). Export prices rose 29.3% for olive oil, 25.1% for citrus, 2.1% for dates, and 0.9% for seafood.

Industry represents 23.5% of the GDP and employs one-third of the active population. The country's industrial sectors are predominantly export-oriented. Among the sectors in decline, are the leather and shoe industry, paper, cardboard, plastic, and wood. The chemicals, textiles and clothing sectors have been growing in recent years; however, the economic crisis triggered by the COVID-19 pandemic impacted especially the textile and clothing sector and the mechanical and electrical engineering sub-sectors, which are still recovering. Overall, the manufacturing sector is estimated to account for 15% of GDP (World Bank) and is strongly connected to European production chains. According to Tunisia's National Observatory of Energy and Mines, oil production fell by 13% in 2024. Daily crude output dropped to 28,800 barrels, down from 33,100 in 2023, while total production declined to 1.4 million tonnes of oil equivalent (toe) from 1.6 million in the previous year.

The local economy is largely orientated towards services, which account for 62.1% of the GDP, including the booming sectors of ICT (information and communication technologies) and tourism. Professional training and research are both rising sectors. The services sector as a whole employs 53.8% of the country's workforce. The tourism industry is also important: 2024 was a record year for the sector, with revenues reaching USD 2.3 billion, up 7.8% from the previous year (official figures). According to Fitch Ratings, Tunisian banks remained resilient despite tough conditions, with rising interest rates boosting profitability. Return on equity increased to 10.8% in 2023 (up from 9.1% in 2022), while weak credit growth helped lift the capital adequacy ratio by 50bp to 14.5%.

Source: World Bank, Latest data available.

Indicator of Economic Freedom

Score:

56,6/100

World Rank:

119

Regional Rank:

10

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

Business environment ranking

Score:

5.12/10

World Rank:

69/82

Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024

Sources of General Economic Information

Ministries

List of Ministries
Ministry of Finance
Ministry of the Economy and Planning
Ministry of Trade

Statistical Office

National Statistics Institute (INS)

Central Bank

Central Bank of Tunisia

Stock Exchange

Tunis Stock Exchange

Other Useful Resources

The Economist - Tunisia
Chamber of Commerce and Industry

Main Online Newspapers

Le Temps (in French)
La Presse (in French)
As-Sabah (in Arabic)

Economic Portals

Tunisia news

Political Outline

Current Political Leaders

President: Kaïs Saïed (since 23 October 2019)
Prime Minister: Kamel Maddouri (since 8 August 2024)

Next Election Dates

Presidential: 2029
Assembly of the Representatives of the People: December 2027

Current Political Context

Tunisia is characterised by a very unstable political context. In October 2019, Kais Saied won the presidential elections over Nabil Karoui and seized exceptional powers in the context of social unrest due to the worsening economic situation caused by the COVID-19 pandemic. In September, Saied suspended the legislature and secured public backing in a July 25th 2022 referendum for a new constitution that weakens the parliament's powers in favour of the presidency. In fact, the new government does not need the approval of the parliament, and cannot be censored without a two-thirds majority of both parliament and a newly constituted council of regional representatives.
For the first time since the 2022 constitution, Tunisia held presidential elections on October 6, 2024. The Independent High Authority for Polls (ISIE) rejected a number of candidates, including President Kais Saied's principal rivals, and the majority of parties abstained from the polls. Contrary to the constitution, which prohibits appealing court rulings, Mondher Zenaidi, Abdellatif Mekki, and Imed Daïmi, who had been reinstated by the Administrative Court, were refused, leaving only Saied, Zouhair Maghzaoui, and Ayachi Zammel affirmed. The ISIE rejected the Administrative Court's order on September 14th to admit these candidates and the Assembly of the Representatives of the People responded by passing an amendment that gave the Court of Appeal of Tunis the court's authority. In the weeks leading up to the election, Zammel was imprisoned and sentenced to over thirteen years for false sponsorship, a move seen by many as judicial harassment to eliminate his candidacy, also considering that similar difficulties were encountered by other contenders as well. Saied ultimately prevailed with 91% of the vote, despite the lowest voter turnout since the revolution (just under 29%). On October 21, he was sworn in for a second term.

Main Political Parties

In 2022, President Kais Saied implemented a decree prohibiting political parties from participating in legislative elections. This move significantly altered the political environment, leading to a notable decline in the influence of traditional political parties. Consequently, many established parties have experienced a reduction in their political presence.

Dominant political parties:

• Ennahda: moderate Islamist party that has historically been a significant political force in Tunisia
• Nidaa Tounes: secular, modernist party with a focus on security and national unity.

Other noteworthy parties include:

• Popular Front: leftist coalition formed by the fusion of socialist, progressive, green, and Arab nationalist parties
• Afek Tounes: center-right, secular, and liberal party
• Tahya Tounes: secular, liberal, and Bourguibist party
• Machrouu Tounes: big-tent secularist party.

Type of State

After the fall of President Zine El Abidine Ben Ali in 2011, Tunisia ratified a new Constitution on 26 January 2014, establishing it as a free, sovereign, and independent state. It adopted a parliamentary republic model with a legal system based on the French civil code and Islamic law in personal status matters. Islam is the official religion, and power is grounded in the sovereignty of the people and the separation of powers.
In 2022, a referendum led to a new constitution that shifted Tunisia to a presidential system, granting the president greater executive powers and centralizing authority.

Executive Power

The President of the Republic is the Head of State, elected for a five-year term through universal, free, direct, and secret suffrage, with an absolute majority of votes required. The President sets the general policies for national security, foreign relations, and defense, ensures the proper functioning of constitutional authorities, and maintains the continuity of the State. The President is limited to a four-term mandate. The President also nominates the Prime Minister, typically from the party or coalition with the most parliamentary seats, though this was subject to change after the 2022 constitutional reforms. The Prime Minister then appoints ministers, although the Ministers of Foreign Affairs and Defense must be appointed with the President's agreement.

Following the 2022 constitutional referendum, the President’s powers were significantly increased. The President now has the authority to appoint the Prime Minister and all government members without parliamentary approval and can dismiss them unilaterally. The President is also protected from censure unless a two-thirds majority in Parliament agrees.

Legislative Power

The people exercise legislative power through a representative assembly, the Assembly of the Representatives of the People, or by referendum. The Assembly currently consists of 161 deputies elected by universal direct suffrage for a five-year term.
The 2022 Constitution created a second chamber called the Council of Regions and Districts. Its members are indirectly elected by regional and district councils, not by universal suffrage (Article 81). Overall, the new constitution reduces the powers of the parliament. While it can still draft and enact laws, it can only pass a motion of no confidence in the government with a two-thirds majority in both chambers.

Indicator of Freedom of the Press

World Rank:

73/180

Indicator of Political Freedom

Ranking:

Free

Political Freedom:

2/7

Civil Liberties:

3/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House