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Tunisia’s economy grows 2.4% amid continued financial concerns

People, Person, Woman, man, Shop Reuters/Jihed Abidellaoui
Tunisia 's economy has grown but the country is suffering from a financial crisis that has led to a shortage of basic food items

Tunisia’s economy grew 2.4 percent in 2022, according to its National Institute of Statistics, down from the 4.3 percent growth registered in 2021.

Growth in the fourth quarter was 1.6 percent year-on-year. Manufacturing was up 6.6 percent on 2021 and services 2.6 percent, although the latter slowed in comparison to previous quarterly growth of 3, 3.8 and 4.2 percent throughout 2022.

The moderate growth of services was attributed to an overall 20.3 percent rise in the hotels, restaurants and cafés sector.

Agriculture and fisheries grew by 2.1 percent, but there was a 12 percent drop in the construction and building sector.

A further 9.8 percent loss was seen in the energy and mining sector in Q4 compared to the corresponding quarter in 2021, as a result of the 10.5 percent drop in output of oil and gas extraction and the overall deceleration of growth in the mining sector by 24.2 percent year-on-year.

Tunisia posted a record 55 percent increase in its trade deficit in 2022, reaching TND 25.2 billion ($8.18 billion).

As the North African country battles an economic crisis, the deficit increase was attributed largely to the loss of trade with several key countries, including China, Turkey, Algeria, Russia, Italy and Spain.

Speaking at the World Government Summit in Dubai earlier this week, Ferid Belhaj, the World Bank’s vice president for Mena said there are particular concerns in the Middle East and North Africa region about Lebanon and Tunisia and, to a lesser extent, Egypt and Jordan.

“We have a number of tensions in those countries,” including debt levels and high inflation, Belhaj said.

Tunisia is suffering a financial crisis which has led to a shortage of basic food items and is seeking a $1.9 billion loan from the International Monetary Fund in exchange for unpopular reforms, including cutting food and energy subsidies.

In December the bank raised the key interest rate by 75 basis points to 8 percent to combat high inflation, marking its third rate hike last year.

Tunisia’s inflation rate jumped to 10.1 percent in December from 9.8 percent in November.