Tunisia: Economic and Political Overview
In this page: Economic Outline | Political Outline | COVID-19 Country Response
For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.
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. 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. According to IMF estimates, economic growth stood at 2.2% in 2022, as the war in Ukraine and rising international commodity prices worsened the existing vulnerabilities of Tunisia’s economy, contributing to a sharp increase in the trade deficit. For 2023, the IMF expects growth to further decelerate to 1.6%, before picking up marginally in 2024 (2.1%).
Tunisia received financial assistance from several international organizations, such as the African Development Bank, the IMF, and the European Union (which disbursed EUR 600 million in loans under the Macro-Financial Assistance emergency support programme). In October 2022, the IMF and the Tunisian authorities have reached a staff-level agreement to support Tunisia's economic policies with a 48-month arrangement under the Extended Fund Facility of about USD 1.9 billion, in an effort to restore Tunisia’s external and fiscal stability. In fact, the country's public finances have suffered in recent years, with the government deficit reaching 6.8% of GDP in 2022 also due to subsidy spending for energy and food (that accounted for 2.8% and 0.4% of GDP respectively, according to the World Bank). Similarly, the debt-to-GDP ratio rose to 88.8% (from 81.8% one year earlier) and is expected to increase marginally in 2023, to 89.2% as per the IMF forecast. The majority of the high external debt is public or public-guaranteed, which may cause doubts about the country’s ability to service its debt. Inflationary pressures increased significantly, mainly from global markets and higher administered prices, resulting in an overall rate of 8.1% in 2022. The Central Bank of Tunisia raised its policy rate by 75 basis points by the end of the year, to 8%, in its third increase of 2022; nevertheless, the IMF expects the inflation rate to remain high over the forecast horizon, at 8.5% this year and 7.9% in 2024. The pressure on the dinar against the dollar increased but the level of foreign exchange reserves has remained stable. 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). According to the latest figures from the National Statistics Institute (INS), as of Q3/2022, the unemployment rate stood at 15.3%; nevertheless, youth unemployment – at 37.8% - was particularly high.
| Main Indicators | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| GDP (billions USD) | 42.52 | 46.84 | 46.28 | 46.02 | 48.10 |
| GDP (Constant Prices, Annual % Change) | -8.7 | 3.3 | 2.2 | 1.6 | 2.1 |
| GDP per Capita (USD) | 3,572 | 3,897 | 3,816 | 3,762 | 3,899 |
| General Government Balance (in % of GDP) | -7.3 | -6.2 | -6.8 | -5.5 | -4.0 |
| General Government Gross Debt (in % of GDP) | 82.8 | 81.8 | 88.8 | 89.2 | 87.1 |
| Inflation Rate (%) | 5.6 | 5.7 | 8.1 | 8.5 | 7.9 |
| Unemployment Rate (% of the Labour Force) | 17.4 | 16.2 | 0.0 | 0.0 | 0.0 |
| Current Account (billions USD) | -2.51 | -2.87 | -4.20 | -3.68 | -3.11 |
| Current Account (in % of GDP) | -5.9 | -6.1 | -9.1 | -8.0 | -6.5 |
Source: IMF – World Economic Outlook Database, Latest available data
Agriculture is a key sector of the Tunisian economy, accounting for 10.1% of GDP and employing 14% 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. According to the latest figures from the National Observatory for Agriculture, the value added of the agricultural sector increased by 2% year-on-year in the second quarter of 2022, following a 3.3% increase recorded in the first quarter.
Industry represents 23.1% of the GDP and employs 33% of the active population. The country's industrial sectors are predominantly export-oriented. Among sectors in decline, there are the leather and shoe industry, paper, cardboard, plastic, and wood. The chemicals and textiles and clothing sectors had 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 14% of GDP (World Bank). According to the latest figures from the National Statistical Institute, in Q3/2022, industrial production fell by 1.2% compared to the previous quarter, due to the decline recorded in the manufacturing (-0.5%) and in the mining and quarrying industries (-4.8%). Production was also down in the energy sector (-3%), the agricultural and food industries (-4.6%), mining (-15.9%), and the oil refining sector (-7.5%).
The local economy is largely orientated towards services, which account for 60.1% 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% of the country's workforce. The tourism industry is also important to the country’s economy: after suffering from the international restrictions imposed during the COVID-19 pandemic, it showed signs of recovery in 2022 when Tunisia received 6.12 million tourists, marking a sharp increase of 159% compared to the previous year. Nevertheless, tourist arrivals were still 32% lower than in 2019, when the country welcomed a record 9.43 million tourists (data by the National Tourism Office).
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
|---|---|---|---|
| Employment By Sector (in % of Total Employment) | 13.8 | 33.5 | 52.8 |
| Value Added (in % of GDP) | 10.1 | 23.1 | 60.1 |
| Value Added (Annual % Change) | -2.5 | 8.6 | 4.0 |
Source: World Bank, Latest available data.
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The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024
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The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House
To find out about the latest status of the COVID-19 pandemic evolution and the most up-to-date statistics on the disease in Tunisia, visit the official portal on COVID-19 of the Ministry of Health, which also provides data on the geographical distribution of the epidemic in the country.
For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.
For the up-to-date information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the website of the Tunisian Customs Authority (in French and Arabic).
For a general overview of trade restrictions due to COVID-19 pandemic in the world, please consult the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
For the information on the economic recovery scheme put in place by the Tunisian government to address the impact of the COVID-19 pandemic on the national economy, please visit the website of the Ministry of Finance (in French and Arabic). For a summary in English of the economic and fiscal measures in vigour, consult the dedicated page from KPMG.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Tunisian government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Tunisia in the IMF’s Policy Tracker platform.
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