Tunisia likely to see slower economic growth

Reuters/Zoubeir Souissi

• World Bank revises projections down by 1% for the year
• Slow reform progress and policy uncertainty held back activity
• Tunisia’s output growth in 2022 surpassed Morocco, Jordan and Libya

The World Bank has forecast that Tunisia’s economy will grow by around 2.3 percent this year, slightly ahead of the 2.2 percent growth predicted for the wider Mena region.

The Tunisian economy will grow by 3 percent in 2024 and remain at the same level the following year, according to its Global Economic Prospects report.

The bank has revised its previous growth projections down by 1 percent for this year, as a result of policy uncertainties amid limited structural reforms, and by 0.6 percent for 2024.

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“In Tunisia, adverse terms of trade shocks, slow reform progress and policy uncertainty held back activity in late 2022,” the report said.

“As a result, Tunisia is one of few economies in the region whose output is still below pre-pandemic levels.”

Nonetheless, the bank revealed that Tunisia’s output growth in 2022 surpassed Morocco (1.1 percent), Jordan (2.5 percent) and Libya (-1.2 percent).

“Among countries with floating exchange rates, the currencies of Morocco and Tunisia have depreciated slightly against the US dollar since mid-2022,” the report added.

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Growth in oil-exporting countries in the Mena region is expected to slow to 2 percent in 2023.

The Tunisian economy grew by 2.1 percent year-on-year in the first quarter of this year, although unemployment hit 16.1 percent, according to data from the National Institute of Statistics.

It was driven by increased revenues from the communications, transport and hotels, restaurants and coffee shops.

Tunisia’s inflation rate eased slightly to 10.1 percent in April 2023, against 10.3 percent the previous month.

Tunisia has more than $2 billion of foreign exchange debt repayments due in the fourth quarter of this year and the first quarter of 2024.