TUNISIA ECONOMIC MONITOR Better Connectivity to Grow Spring 2025 Tunisia Economic Monitor Better Connectivity to Grow Spring 2025 Middle East and North Africa Region © 2025 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclu- sions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy, completeness, or currency of the data included in this work and does not assume responsibility for any errors, omissions, or discrepancies in the information, or liability with respect to the use of or fail- ure to use the information, methods, processes, or conclusions set forth. 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TABLE OF CONTENTS Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v List of Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .vii Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix Résumé exécutif . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii ‫ الملخص التنفيذي‬. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xvii Part A: Recent Economic Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1. The Tunisian economy grew moderately in 2024, pushed by the partial recovery of agriculture and tourism but weighed down by oil, mining and manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2. The current account deficit continued to moderate easing some of the pressure on external financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3. Tunisia’s increasing reliance on domestic sources to fill the external financing gap, which are declining from a high peak, would present medium-term risks to currency and price stability . . . . . . . . . .6 4. The rising domestic financing of the public debt has increased the sovereign-banking nexus with potential effects on the credit market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 5. Inflation continued to moderate, having converged to the pre-Covid average, although it remains higher for food products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 6. The budget continues to be under pressure as the low growth affects tax revenues . . . . . . . . . . . . . . . . .10 7. Assuming drought conditions ease, we expect a moderate growth uptick in 2025–27 assuming but downward risks remain elevated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Part B: Improving Ports to support Tunisia’s Development and Growth . . . . . . . . . . . . . . . . . . . . 15 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 List of Figures Figure 1 Tunisia’s Elusive Economic Recovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Figure 2 Tunisian Economy is Diverging from Regional Peers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Figure 3 Agriculture’s Recovery has been Modest after the 2023 Drop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Figure 4 Hydrocarbons, Garments and Construction Dragged Growth in 2024 . . . . . . . . . . . . . . . . . . . . . . . 2 Figure 5 Flattening Labor Participation and Unemployment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Figure 6 Tunisia has a Lower FLFP than Most Countries at Similar Level of Economic Development . . . . . 4 iii Figure 7 Having Children Decreases Labor Participation for Women but it Increases it for Men . . . . . . . . . 4 Figure 8 Garments and Mechanic Industries Drove Down the 2024 Trade Balance Compensated by the Shrinking Deficit of Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Figure 9 Rising Import Quantities have Driven the Expansion of the Trade Deficit . . . . . . . . . . . . . . . . . . . . . 5 Figure 10 The Trade Deficit along with Services Surplus Helped Reduce the Current Account Deficit in Recent Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Figure 11 A Declining Share of Gross External Budgetary Needs Estimated in the Budget have been Mobilized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Figure 12 Limited FDI, Portfolio and Capital Flows Put Pressure on Tunisia’s Financing of its External Needs, which are Declining from the 2022 Peaks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Figure 13 The Decline in Reserves is Associated with a Widening CAD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Figure 14 Tunisia Increasingly Relies on Domestic Financing of the Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Figure 15 The Share of Net Government Receivables in Total Credits Continues to Increase (and Accelerates) as Receivables to the Economy Growth Falters . . . . . . . . . . . . . . . . . . . . . . . . . . .8 Figure 16 Inflation Started to Decline in 2023 and has Now Converged to its pre-Covid Average . . . . . . . . 10 Figure 17 Real Interest Rate is at the Highest Level since March 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Figure 18 Tax Revenues Under-Performed in 2024 Relatively to the Expectations a Year Earlier . . . . . . . . . 11 Figure 19 The Public Wage Bill Compression Contained Public Expenditures Growth . . . . . . . . . . . . . . . . . .11 Figure 20 Hydrocarbons and Cereals Account for More than Half of Volumes Traded in Tunisian Ports 16 Figure 21 Tunisia’s Container Port Traffic Lags its North African Neighbors (GDP constant prices; 2019=100) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Figure 22 Shipment Times to Rades are High by Regional Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 Figure 23 Tunisia’s Container Port Traffic Lags its North African Neighbors . . . . . . . . . . . . . . . . . . . . . . . . . . .18 Figure 24 Tunisian Firms Perceive Customs and Trade Regulations as Significant Constraints . . . . . . . . . . 19 Figure 25 Imported Containers Spend More Time in Rades than in Most other Ports in Africa . . . . . . . . . . .20 List of Boxes Box 1 Expanding Affordable and Quality Childcare Services Could Raise FLFP in Tunisia, with Potentially Significant Impacts on Economic Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Box 2 Ongoing Initiatives to Streamline Trade Facilitation in Tunisian Ports . . . . . . . . . . . . . . . . . . . . . . . . 19 Box 3 Estimating Tunisia’s Potential Economic Gains from Improved Port Connectivity and Dwell Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 List of Tables Table 1 Key Macroeconomic Indicators, 2022–27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 iv TUNISIA ECONOMIC MONITOR – BETTER CONNECTIVITY TO GROW ACKNOWLEDGEMENTS T he Tunisia Economic Monitor (TEM) is a (Senior Operations Officer) and Mhamed Ben Salah report that provides information on recent (Consultant). It benefited from inputs and comments economic developments and policies in from Federica Alfani (Poverty Economist), Majda Tunisia, as well as the country’s economic outlook Benzidia (Consultant), Jai Malik (Young Professional), and challenges to its development. The report is Phuong Le Minh (Consultant) and Dominic Patella aimed at a diverse audience, including policy mak- (Sr. Transport Specialist). The report was prepared ers, business leaders, financial market actors, and under the direction of Moustapha Ndiaye (Division analysts and professionals working on or in Tuni- Director, Maghreb), Eric Le Borgne (Practice sia. It is produced by the North Africa and Middle Manager, Economic Policy), Alexandre Arrobbio East department of the World Bank Group’s Mac- (Country Manager, Tunisia), and Abdoulaye Sy (Lead roeconomics, Trade and Investment (MTI) global Economist, Prosperity Group). practice. The opinions and conclusions expressed in Each issue of the TEM contains a section on this report are those of the World Bank staff and do recent economic developments and a discussion on not necessarily represent the views of members of the the economic outlook, followed by a special section World Bank Board of Directors or the countries they based on the World Bank’s analysis of Tunisia. The represent. report was originally published in English with the title For information on the World Bank and its “Better connectivity to grow” and was first published activities in Tunisia, please visit: https://www.worldb​ in 2025. In case of any discrepancy, the original Eng- ank.org/en/country/tunisia or https://www.albankald​ lish language version prevails. awli.org/ar/country/tunisia (Arabic). For questions or The report is authored by a team led by comments on the content of this publication, please Massimiliano Calì (Senior Economist) and Mohamed contact Massimiliano Calì (mcali@worldbank.org) or Habib Zitouna (Consultant). The team also Eric Le Borgne (eleborgne@worldbank.org). includes Jawhar Abidi (Consultant), Riadh Ammari The deadline for input and forecast preparation (Communications Specialist), Asma Bouraoui Khouja is May 9th, 2025. v LIST OF ACRONYMS AEO Authorized Economic Operator OMMP Office de la Marine Marchande et des BL Budget Law Ports BNA Banque Nationale Agricole PCS Port Community System CAD Current Account Deficit Ro-RO Roll-on/Roll-off CIT Corporate Income Tax SOE State-Owned Enterprise CPI Consumer Price Index STAM Société Tunisienne d’Acconage et de CTN Compagnie Tunisienne de Navigation Manutention EU European Union TEU Twenty-foot Equivalent Unit FDI Foreign Direct Investment TND Tunisian Dinar FLFP Female Labor Force Participation TOS Terminal Operating System GDP Gross Domestic Product TTN Tunisia Trade Net INS Institut National de la Statistique UGTT Union Générale Tunisienne du Travail LFS Labor Force Survey UN United Nations LPI Logistics Performance Index UNCTAD United Nations Conference on Trade LSCI Liner Shipping Connectivity Index and Development MoW Ministry of Family, Women, Children, USD United States Dollar and the Elderly VAT Value Added Tax OdC Office des Céréales WBL Women, Business, and the Law OECD Organisation for Economic Co-operation and Development vii EXECUTIVE SUMMARY The Tunisian economy grew The current account deficit moderately in 2024, pushed by the continued to moderate, easing some partial recovery of agriculture and of the pressure on external financing tourism but weighted down by oil, mining and manufacturing The trade deficit widened by 10.9 percent in 2024, remaining stable as a share of GDP at 11.4 percent. The Tunisian economy grew by 1.4 percent in 2024 The deficit deteriorated further in the first quarter after the zero growth in 2023 and it is diverging from of 2025, as it increased by two thirds relative to the its neighbors in North Africa, with a GDP below its same period in 2024, driven by a 5.9 percent decline pre-Covid level in 2024. The economy continues to in exports. The surge in agricultural exports compen- operate in a challenging policy and financing envi- sated for the deterioration of the trade balance of gar- ronment, including regulatory barriers to invest- ments and mechanic industries in 2024. The energy ment, which is not conducive to robust and sustained deficit widened further on the back of rising import growth. The limited recovery of agriculture—with ris- prices, continuing to account for the bulk of the mer- ing rainfall levels but still below historical averages— chandise trade deficit. The stability of the trade deficit along with the moderate performance of oil and gas, and the increase in the services surplus reduced the manufacturing and construction sectors dragged the current account deficit (CAD) to 1.7 percent of GDP growth of the economy in 2024. This modest recovery in 2024, compared with 2.3 per cent of GDP in 2023 continued to weigh on the labor market. The unem- and 8.8 per cent in 2022. While the lower CAD eases ployment rate in 2024 was almost a percentage point the pressure on external financing needs, the latter above its pre-Covid, and the labor force participa- remains significant especially due to the burdensome tion rate hovered 1.2 percentage point below the pre- debt service. Covid rate. Expanding affordable and quality child- care services and strengthening parental leaves could raise labor force participation, particularly for women in Tunisia, with potentially significant impacts on economic growth. ix Tunisia’s increasing reliance on which has restricted an important channel of short- domestic sources to fill the external term credit in Tunisia. financing gap would present medium- term risks to currency and price Inflation continued to moderate, stability having converged to the pre-Covid average, although it remains higher The tightening financing conditions among bilat- for food products eral and multilateral lenders are creating challenges for Tunisia in seeking to meet its external financing Inflation continued to moderate since the peaks of two needs, as reflected in the declining share of external years ago on the back of lower global prices and lim- budgetary needs eventually financed by the end of ited domestic demand. It reached 5.6 percent in April, the year. With shrinking sovereign financing, the shift in line with the pre-Covid rate. However, food inflation towards domestic sources to cover its external needs (7.3 percent in April 2025) remains above the pre- accelerated, notably through monetary financing. Covid average (3.7 percent in February 2020), as the The Budget Law authorizes the Central Bank to lend water scarcity and some import compression reduced to the government directly up to 7 billion dinars (4.1 the supply in domestic food markets, while the Rama- percent of GDP) in 2025, the same amount that was dan festivities raised the demand. With declining infla- also lent in 2024. The use of this facility for debt reim- tion and lower growth, the Central Bank reduced its bursement and the widening trade deficit caused for- policy rate from 8.0 to 7.5 percent, the first change eign reserves to decline below 100 days of import in since December 2022. March 2025, the first time in 2 years. While the Dinar has remained stable overall, the decline in reserves underscores the pressure on external balances. The budget continues to be under pressure as limited economic activity affects tax revenues The rising domestic financing of the public debt has increased the The budget deficit declined from 6.3 percent of GDP sovereign-banking nexus with in 2023 to 5.8 percent in 2024, as the reduced growth potential effects on the credit in expenditures more than compensated the lower- market than-expected increase in tax revenues. Indirect taxes fared worse than direct taxes, reflecting the impact of Given the challenging external financing environment the limited growth environment, The continued com- and the rising public debt, the domestic banking sys- pression of the wage bill, from 15.1 percent of GDP in tem has continued to increase its role in debt financ- 2022 to 13.4 percent in 2024, and the stalling of subsi- ing. As a result, the share of domestic debt in total debt dies limited the growth of public expenditures. Revers- increased from 29.7 percent in 2019 to 53.8 percent in ing the decline in public capital expenditures would 2024, with a planned increase to 58.3 percent in 2025. help to revive economic growth. The sustained use of local funding to finance public debt can stifle that growth. The share of central gov- ernment in total claims of the banking sector increased Assuming drought conditions ease, from 31.3 percent in August 2023 to 40.8 percent in we expect a moderate growth uptick August 2024. Credit to the rest of the economy, on the in 2025–27 but downward risks other hand, declined from 8.6 to 4.8 percent during remain elevated the same period (6-monthly average annual growth rate). These constraints to the credit market are com- We expect the economy to grow by 1.9 percent in pounded by the increasing banking exposure to SOEs 2025, assuming continued improvement in rainfall and the recent overhaul on the use of bank cheques, and a delayed recovery of the manufacturing sector, x TUNISIA ECONOMIC MONITOR – BETTER CONNECTIVITY TO GROW which could be negatively affected by the effects of for roll-on/roll-off (Ro-Ro) units, but not for container trade uncertainty. Growth is eventually expected to cargo handling. They are also small and shallow com- stabilize at around 1.6–1.7 percent in 2026–27, but pared to other Mediterranean ports, which aligns with the forecasts are subject to significant downside risks, Ro-Ro traffic but affects connectivity, congestion, related to the potential disruption of trade uncertainty, and operating efficiency for containers. The lack of limited external financing conditions and a further development of container shipping has constrained deterioration of water availability. While the macro sit- Tunisia’s connectivity to wider global markets. The uation is expected to stabilize, Tunisia’s public finance equipment and infrastructure constraints are com- and external position would remain vulnerable in the pounded by complexities in the processing of goods absence of sufficient external financing and progress in ports, translating into high containers’ waiting times in the economy’s modernization. in ports, and significant firms’ logistics and inventory costs. New World Bank estimates suggest that Tunisia Better port connectivity and could gain 4–5 percent of GDP from higher port more efficient trade facilitation shipping connectivity and reduced dwell time within procedures could yield significant 3–4 years, with larger gains in the long run. Various gains to the Tunisian economy infrastructure strengthening and policy options would As a relatively small open economy, the performance improve Tunisia’s port connectivity and trade facilita- of the port sector is crucial to the Tunisian economy. tion, enabling such large economic gains. One such Efficient ports offer the chance to leverage Tunisia’s option is to expand the authorized economic operator location along the Gibraltar-Suez shipping lane, which program, which according to our analysis can poten- accounts for over a third of containerized traffic in tially lead to 94,000 jobs and an increase in the wage the world. Tunisia’s ports are relatively well equipped bill equivalent to 0.8 percent of GDP. Executive Summary xi RÉSUMÉ EXÉCUTIF L’économie tunisienne a connu des congés parentaux pourraient accroître la parti- une croissance modérée en 2024, cipation au marché du travail, en particulier pour les portée par la reprise partielle de femmes, avec des impacts potentiellement significa- l’agriculture et du tourisme, mais tifs sur la croissance économique. freinée par les hydrocarbures, les mines et l’industrie manufacturière Le déficit du compte courant a L’économie tunisienne a progressé de 1,4 % en 2024 continué de se réduire, allégeant après une croissance nulle en 2023. La trajectoire est une partie de la pression sur le divergente par comparaison aux pays de la région financement extérieur Afrique du Nord, avec un PIB inférieur à son niveau pré-Covid en 2024. L’économie continue de fonction- Le déficit commercial s’est creusé de 10,9 % en ner dans un environnement complexe sur le plan des 2024, restant stable en pourcentage du PIB à 11,4 %. politiques et du du financement vu, notamment, les Le déficit s’est encore détérioré au cours du premier contraintes réglementaires à l’investissement qui ne trimestre de 2025, augmentant de deux tiers par rap- favorisent pas une croissance robuste et soutenue. port à la même période en 2024, sous l’effet d’une La reprise limitée de l’agriculture — avec des niveaux baisse de 5,9 % des exportations. La forte hausse de précipitations en hausse mais toujours inférieurs des exportations agricoles a compensé la détériora- aux moyennes historiques — ainsi que la performance tion de la balance commerciale des industries de l’ha- modérée des secteurs du pétrole et du gaz, de l’in- billement et des industries mécaniques et électrique dustrie manufacturière et de la construction ont freiné en 2024. Le déficit énergétique s’est encore creusé la croissance de l’économie en 2024. Cette modeste en raison de la hausse des prix à l’importation, conti- reprise a continué de peser sur le marché du travail. nuant de représenter l’essentiel du déficit commer- Le taux de chômage en 2024 était en effet près d’un cial. La stabilité du déficit commercial et l’augmen- point de pourcentage supérieur à son niveau d’avant tation de l’excédent des services ont réduit le déficit Covid, et le taux de participation au marché du travail du compte courant (DCC) à 1,7 % du PIB en 2024, se situait à 1,2 point de pourcentage en dessous du contre 2,3 % du PIB en 2023 et 8,8 % en 2022. Si la taux d’avant la pandémie. baisse du DCC atténue la pression sur les besoins de L’expansion de services de garde d’enfants financement extérieur, ces derniers restent significa- abordables et de qualité, ainsi que le renforcement tifs, notamment en raison du lourd service de la dette. xiii La dépendance croissante de la en revanche, a diminué de 8,6 à 4,8 % au cours de Tunisie aux sources nationales pour la même période (taux de croissance annuel moyen combler le déficit de financement sur 6 mois). Malgré une légère reprise de la part extérieur présenterait des risques à des crédits octroyés au reste de l’économie, l’utilisa- moyen terme pour la stabilité de la tion soutenue du financement local pour financer la monnaie et des prix dette publique peut créer un effet d’éviction et étouf- fer cette croissance. Ces contraintes sur le marché Le durcissement des conditions de financement du crédit sont aggravées par l’exposition croissante auprès des bailleurs bilatéraux et multilatéraux com- des banques aux entreprises publiques et la récente plique la capacité de la Tunisie à adresser ses besoins refonte de l’utilisation des chèques bancaires pour les en financement extérieur, comme en témoigne la paiements, qui a restreint un important canal de crédit baisse de la part des besoins budgétaires extéri- à court terme en Tunisie. eurs prévus qui arrivent finalement à être financés en fin d’année. Avec la diminution du financement L’inflation a continué de ralentir souverain, le recours aux sources nationales pour convergeant vers la moyenne pré- couvrir les besoins extérieurs s’est accéléré, notam- Covid, même si elle demeure plus ment par le biais du financement monétaire. La loi de élevée pour les produits alimentaires finances autorise la Banque centrale à prêter directe- ment au gouvernement jusqu’à 7 milliards de dinars L’inflation a continué de ralentir depuis les pics de (4,1 % du PIB) en 2025, le même montant que celui 2023, grâce à la baisse des prix mondiaux et à prêté en 2024. Le recours à cette solution de facil- une demande intérieure limitée. Elle a atteint 5,6 % ité pour le remboursement de la dette et le creuse- en avril 2025, un niveau équivalent au taux d’avant ment du déficit commercial, ont entraîné une baisse Covid. Cependant, l’inflation alimentaire (7,3 % en des réserves de change, passant en dessous de 100 avril 2025) reste supérieure à la moyenne d’avant jours d’importation en mars 2025 pour la première la pandémie (3,7 % en février 2020), car la séche- fois en deux ans. Bien que le dinar soit resté stable resse et une certaine compression des importations dans l’ensemble, la baisse des réserves souligne la ont réduit l’offre sur les marchés alimentaires natio- pression exercée sur les équilibres extérieurs. naux, tandis que les festivités du Ramadan ont sti- mulé la demande. Face à la baisse de l’inflation et L’augmentation du financement de la croissance, la Banque centrale a réduit son intérieur de la dette publique taux directeur de 8,0 à 7,5 %, le premier changement a accru le lien entre le secteur depuis décembre 2022 et la première baisse depuis bancaire et le budget de l’Etat, avec septembre 2020. des effets potentiels sur le marché du crédit Le budget continue d’être sous pression alors que l’activité Compte tenu du contexte difficile du financement exté- économique limitée affecte les rieur et de l’augmentation de la dette publique, le sys- recettes fiscales tème bancaire national a continué à accroître son rôle dans le financement de la dette. En conséquence, la Le déficit budgétaire a diminué, passant de 6,3 part de la dette intérieure dans la dette totale est pas- % du PIB en 2023 à 5,8 % en 2024, la croissance sée de 29,7 % en 2019 à 53,8 % en 2024, avec une réduite des dépenses ayant plus que compensé la augmentation prévue à 58,3 % en 2025. La part du hausse plus faible que prévu des recettes fiscales. gouvernement central dans le total des créances du Les impôts indirects ont moins bien performé que secteur bancaire est passée de 31,3 % en août 2023 à les impôts directs, reflétant l’impact du contexte de 40,8 % en août 2024. Le crédit au reste de l’économie, xiv TUNISIA ECONOMIC MONITOR – BETTER CONNECTIVITY TO GROW croissance limitée. La compression continue de la Une meilleure connectivité portuaire masse salariale, de 15,1 % du PIB en 2022 à 13,4 et des procédures de facilitation des % en 2024, et le rationnement des subventions ont échanges plus efficaces pourraient limité la croissance des dépenses publiques. Inver- générer des gains significatifs pour ser la tendance à la baisse des dépenses publiques l’économie tunisienne en capital contribuerait à relancer la croissance éco- nomique. En tant qu’économie ouverte relativement petite, la performance du secteur portuaire est cruciale pour l’économie tunisienne. Des ports performants offrent En supposant que les conditions la possibilité de tirer parti de la situation géographique de sécheresse s’atténuent, nous de la Tunisie le long de l’axe maritime Gibraltar-Suez, prévoyons une reprise modérée de qui représente plus d’un tiers du trafic conteneurisé la croissance en 2025–27, mais les mondial. Les ports tunisiens sont relativement bien risques à la baisse restent élevés équipés pour les unités roulières (Ro-Ro), mais pas pour la manutention de conteneurs. Ils sont égale- Nous prévoyons une croissance économique de ment petits et peu profonds par rapport aux autres 1,9 % en 2025, en supposant une amélioration conti- ports méditerranéens, ce qui convient au trafic de nue des précipitations et une reprise tardive du sec- Ro-Ro mais affecte la connectivité, la congestion et teur manufacturier, qui pourrait être affecté négati- l’efficacité opérationnelle des conteneurs. Le manque vement par les effets de l’incertitude commerciale. de développement du transport maritime par conte- La croissance devrait finalement se stabiliser autour neurs a limité la connectivité de la Tunisie à de plus de 1,6–1,7 % en 2026–27, mais les prévisions sont vastes marchés mondiaux. Les contraintes d’équipe- soumises à d’importants risques de baisse, liés à ment et d’infrastructure sont aggravées par la com- la perturbation potentielle de l’incertitude commer- plexité du traitement des marchandises dans les ciale, aux conditions de financement extérieur et à ports, ce qui se traduit par des délais d’attente éle- une nouvelle détérioration de la disponibilité de l’eau. vés pour les conteneurs et des coûts importants de Si la situation macroéconomique devait se stabili- logistique et de stockage pour les entreprises. De ser, les finances publiques et la position extérieure nouvelles estimations de la Banque mondiale sug- de la Tunisie resteraient vulnérables en l’absence de gèrent que la Tunisie pourrait gagner 4 à 5 % de son financement extérieur suffisant et de progrès dans la PIB grâce à une meilleure connectivité maritime por- modernisation de l’économie. tuaire et à une réduction du temps de séjour d’ici 3 à 4 ans, avec des gains plus importants à long terme. Diverses options de renforcement des infrastructures et des politiques publiques pourraient améliorer la connectivité portuaire et faciliter les échanges com- merciaux de la Tunisie, permettant ainsi des gains économiques tout aussi importants. Résumé exécutif xv ‫الملخص التنفيذي‬ ‫عا بانخفاض بنسبة ‪ 5.9‬يف املائة‬ ‫بالفرتة نفسها من عام ‪ ،2024‬مدفو ً‬ ‫منا االقتصاد التونيس بوترية معتدلة يف ‪ ،2024‬بفضل‬ ‫وضت الزيادة يف الصادرات الزراعية تدهور‬ ‫يف الصادرات‪ .‬وقد ع ّ‬ ‫االنتعاش الجزيئ للفالحة والسياحة لكنه تأثر برتاجع‬ ‫امليزان التجاري لصناعات النسيج و الصناعات امليكانيكية والكهربائية‬ ‫آداء قطاعات الطاقة‪ ،‬املناجم والصناعات املعملية ‪.‬‬ ‫يف عام ‪ .2024‬كام اتسع عجز الطاقة بشكل أكرب عىل خلفية ارتفاع‬ ‫أسعار الواردات‪ ،‬واستمر يف متثيل الجزء األكرب من عجز تجارة السلع‪.‬‬ ‫منا االقتصاد التونيس بنسبة ‪ 1.4‬يف املائة يف ‪ 2024‬بعد تسجيله منوا بـ‬ ‫أدى استقرار العجز التجاري وزيادة فائض الخدمات إىل خفض عجز‬ ‫را مختلفًا عن جريانه يف شامل‬ ‫‪ 0‬يف املائة يف ‪ 2023‬وهو ما يعكس مسا ً‬ ‫الحساب الجاري إىل ‪ 1.7‬يف املائة من الناتج املحيل اإلجاميل يف عام‬ ‫إفريقيا‪ ،‬حيث ال يزال الناتج املحيل اإلجاميل يف ‪ 2024‬دون مستواه قبل‬ ‫‪ ،2024‬مقارنة بـ ‪ 2.3‬يف املائة من الناتج املحيل اإلجاميل يف ‪ 2023‬و‪8.8‬‬ ‫جائحة كوفيد‪ .-19‬ويواصل االقتصاد التونيس العمل يف بيئة ذات تحديات‬ ‫يف املائة يف ‪ .2022‬ويف حني أن انخفاض عجز الحساب الجاري يخفف‬ ‫عىل مستوى السياسات االقتصادية والتمويالت‪ ،‬مبا يف ذلك وجود حواجز‬ ‫الضغط عىل احتياجات التمويل الخارجي‪ ،‬إال أن هذا األخري ال يزال هاما‬ ‫تنظيمية أمام االستثامر‪ ،‬مام ال يساعد عىل تحقيق منو قوي ومستدام‪.‬‬ ‫خاصة بسبب خدمة الديون املهمة‪.‬‬ ‫وقد ساهم التعايف املحدود يف القطاع الفالحي رغم ارتفاع‬ ‫معدالت األمطار التي ال تزال أقل من املعدالت التاريخية – إىل جانب‬ ‫األداء املعتدل يف قطاعات النفط والغاز‪ ،‬والصناعات املعملية‪ ،‬والبناء‪ ،‬يف‬ ‫اعتامد تونس املتزايد عىل املصادر املحلية لسد فجوة‬ ‫إبطاء منو االقتصاد يف ‪ .2024‬واستمر هذا املستوى من التعايف يف التأثري‬ ‫التمويل الخارجي من شأنه أن يشكل ضغوطا محتملة‬ ‫عىل سوق العمل‪ ،‬حيث بلغ معدل البطالة يف عام ‪ 2024‬ما يقارب نقطة‬ ‫عىل سعر الرصف واألسعار عىل املدى املتوسط‬ ‫مئوية أعىل من مستواه قبل الجائحة‪ ،‬يف حني ظل معدل املشاركة يف‬ ‫القوة العاملة أقل بـ‪ 1.2‬نقطة مئوية من مستواه ما قبل كوفيد‪.‬‬ ‫إن تشديد رشوط التمويل الثنايئ ومتعدد األطراف يُشكل تحديا لتونس‬ ‫ويف هذا النطاق‪ ،‬ميكن أن يؤدي توسيع خدمات رعاية األطفال‬ ‫يف سعيها لتلبية احتياجاتها من التمويل الخارجي‪ ،‬كام يتجىل يف انخفاض‬ ‫بأسعار معقولة وجودة عالية‪ ،‬وتعزيز إجازات الوالدين‪ ،‬إىل زيادة‬ ‫ول يف نهاية العام‪ .‬ومع‬ ‫نسبة احتياجات امليزانية الخارجية التي مُتُ ّ‬ ‫معدالت املشاركة يف سوق العمل‪ ،‬ال سيام بالنسبة للنساء يف تونس‪ ،‬مام‬ ‫انكامش التمويل الخارجي‪ ،‬تسارع التحول نحو املصادر املحلية لتغطية‬ ‫قد يكون له تأثريات كبرية عىل النمو االقتصادي‪.‬‬ ‫االحتياجات الخارجية‪ ،‬ال سيام من خالل التمويل النقدي‪ .‬يُجيز قانون‬ ‫ة ما يصل إىل ‪ 7‬مليارات دينار‬ ‫املالية للبنك املركزي إقراض الحكومة مبارش ً‬ ‫(‪ 4.1%‬من الناتج املحيل اإلجاميل) يف ‪ ،2025‬وهو نفس املبلغ الذي تم‬ ‫واصل عجز الحساب الجاري الرتاجع‪ ،‬مام ساهم يف‬ ‫إقراضه أيضً ا يف عام ‪ .2024‬وقد تسبب استخدام هذه التسهيالت لسداد‬ ‫تخفيف بعض الضغوط عىل التمويل الخارجي‬ ‫الديون واتساع العجز التجاري يف انخفاض االحتياطيات األجنبية إىل أقل‬ ‫من ‪ 100‬يوم من االسترياد يف مارس ‪ ،2025‬وهي املرة األوىل منذ عامني‪.‬‬ ‫اتسع العجز التجاري بنسبة ‪ 10.9‬يف املائة يف عام ‪ ،2024‬وظل مستق ً‬ ‫را‬ ‫وبينام حافظ الدينار عىل قدر من االستقرار‪ ،‬فإن انخفاض االحتياطي‬ ‫كنسبة من الناتج املحيل اإلجاميل عند ‪ 11.4‬يف املائة‪ .‬وتفاقم العجز‬ ‫يعكس الضغوط املتواصلة عىل التوازنات الخارجية‪.‬‬ ‫أكرث يف الثاليث األول من ‪ ،2025‬حيث إرتفع مبقدار الثلثني مقارنة‬ ‫‪xvii‬‬ ‫شأن عكس اتجاه االنخفاض يف اإلنفاق الرأساميل العام أن يُسهم يف إنعاش‬ ‫لقد أدى ارتفاع التمويل املحيل للدين العمومي إىل‬ ‫النمو االقتصادي‪.‬‬ ‫زيادة الرتابط بني املالية العمومية والقطاع البنيك‪ ،‬مام‬ ‫قد يؤثر عىل سوق اإلقراض‪.‬‬ ‫بافرتاض تحسن عىل مستوى الجفاف‪ ،‬فإننا نتوقع‬ ‫يف ظل تحديات بيئة التمويل الخارجي وارتفاع الدين االعمومي‪ ،‬واصل‬ ‫ً‬ ‫معتداًل يف النمو يف الفرتة ‪ ،2027–2025‬لكن‬ ‫ارتفا ً‬ ‫عا‬ ‫النظام املرصيف املحيل تعزيز دوره يف متويل الديون‪ .‬ونتيجة لذلك‪ ،‬ارتفعت‬ ‫التحديات ال تزال مرتفعة‬ ‫حصة الدين املحيل يف إجاميل الدين من ‪ 29.7%‬يف ‪ 2019‬إىل ‪ 53.8%‬يف‬ ‫‪ ،2024‬مع زيادة مخططة إىل ‪ 58.3%‬يف ‪ .2025‬وميكن أن يؤدي االستخدام‬ ‫نتوقع أن ينمو االقتصاد بنسبة ‪ 1.9%‬يف ‪ ،2025‬بافرتاض استمرار تحسن‬ ‫املستدام للتمويل املحيل لتمويل الدين العام إىل التأثري عيل هذا النمو‪.‬‬ ‫هطول األمطار وتأخر انتعاش قطاع الصناعات التحويلية‪ ،‬الذي قد يتأثر‬ ‫ارتفعت حصة القطاع العمومي يف إجاميل مطالبات القطاع املرصيف من‬ ‫با بآثار عدم اليقني عىل مستوى سياق التجارة العاملية‪ .‬ومن املتوقع‬ ‫سل ً‬ ‫‪ 31.3%‬يف أغسطس ‪ 2023‬إىل ‪ 40.8%‬يف أغسطس ‪ .2024‬من ناحية‬ ‫أن يستقر النمو يف نهاية املطاف عند حوايل ‪ 1.7%–1.6‬يف الفرتة ‪–2026‬‬ ‫أخرى‪ ،‬انخفض التمويل لبقية االقتصاد من ‪ 8.6%‬إىل ‪ 4.8%‬خالل نفس‬ ‫‪ ،2027‬إال أن هذه التوقعات عرضة ملخاطر كبرية‪ ،‬تتعلق باحتامل تعطل‬ ‫الفرتة (متوسط​​معدل النمو السنوي ملدة ‪ 6‬أشهر)‪ .‬وتتفاقم هذه القيود‬ ‫الوضع التجاري العاملي‪ ،‬ومحدودية ظروف التمويل الخارجي‪ ،‬وتدهور‬ ‫عىل سوق اإلقراض بسبب تزايد انكشاف البنوك عىل املؤسسات العمومية‪،‬‬ ‫إضايف يف توافر املياه‪ .‬وبينام يُتوقع استقرار الوضع الكيل‪ ،‬ستظل املالية‬ ‫إىل جانب التعديالت األخرية عىل استخدام الشيكات البنكية يف املعامالت‪،‬‬ ‫العامة التونسية ووضعها الخارجي عرضة للتحديات يف ظل نقص التمويل‬ ‫ما أدى إىل تقييد أحد القنوات املهمة للتمويل قصري األجل يف تونس‬ ‫الخارجي الكايف والتقدم املحرز عىل مستوى تحديث االقتصاد‪.‬‬ ‫إن تحسني الرتابط باملوانئ وإجراءات تيسري التجارة‬ ‫استمر التضخم يف االعتدال‪ ،‬بعد أن اقرتب من متوسط​​‬ ‫من شأنه أن يحقق مكاسب كبرية لالقتصاد التونيس‬ ‫ما قبل كوفيد‪ ،‬عىل الرغم من أنه ال يزال أعىل بالنسبة‬ ‫للمنتجات الغذائية‬ ‫د أداء قطاع املوانئ أمرا ً بالغ األهمية لالقتصاد التونيس املفتوح‬ ‫يُع ّ‬ ‫ة النخفاض‬ ‫استمر التضخم يف االعتدال منذ ذروته قبل عامني‪ ،‬نتيج ً‬ ‫عالة فرصة االستفادة من موقع تونس‬ ‫ّ‬ ‫الف‬ ‫املوانئ‬ ‫تتيح‬ ‫ً‪.‬‬ ‫ا‬ ‫نسبي‬ ‫واملحدود‬ ‫األسعار العاملية وضعف الطلب املحيل‪ .‬هذا إذ وصل إىل ‪ 5.6%‬يف أفريل‬ ‫مُيثّل أكرث من ثلث‬ ‫عىل طول ممر جبل طارق‪-‬السويس املالحي‪ ،‬الذي ُ‬ ‫‪ ،2025‬متامشياً مع معدل ما قبل جائحة كوفيد‪ .‬ومع ذلك‪ ،‬ال يزال تضخم‬ ‫هزة تجهيزا ً جيدا ً نسبياً‬ ‫د موانئ تونس ُ‬ ‫مج ّ‬ ‫حركة الحاويات يف العامل‪ .‬ت ُع ّ‬ ‫أسعار املواد الغذائية ‪ 7.3%‬يف أفريل ‪ )2025‬أعىل من متوسط ​​ما قبل‬ ‫هزة ملناولة بضائع الحاويات‪ .‬كام‬ ‫لوحدات الدحرجة ولكنها ليست ُ‬ ‫مج ّ‬ ‫جائحة كوفيد (‪ 3.7%‬يف فرباير ‪ ،)2020‬حيث أدى ندرة املياه وضغط‬ ‫ة مبوانئ البحر األبيض املتوسط​​األخرى‪ ،‬وهو ما يتامىش‬ ‫أنها صغرية مقارن ً‬ ‫الواردات إىل انخفاض العرض يف أسواق املواد الغذائية املحلية‪ ،‬بينام زاد‬ ‫مع حركة الدحرجة‪ ،‬ولكنه يُؤث ّر عىل الربط واالزدحام ونجاعة تشغيل‬ ‫الطلب خالل شهر رمضان‪ .‬ومع انخفاض التضخم وتباطؤ النمو‪ ،‬خفض‬ ‫الحاويات‪ .‬وقد أدّى نقص تطوير الشحن بالحاويات إىل تقييد لرتابط‬ ‫البنك املركزي سعر الفائدة املرجعي من ‪ 8.0%‬إىل ‪ ،7.5%‬وهو أول تغيري‬ ‫تونس باألسواق العاملية األوسع‪ .‬كام تُفاقم قيود املعدات والبنية التحتية‬ ‫منذ ديسمرب ‪.2022‬‬ ‫تعقيدات معالجة البضائع يف املوانئ‪ ،‬مام يُرتجم إىل فرتات انتظار طويلة‬ ‫للحاويات‪ ،‬وتكاليف لوجستية وتخزينية كبرية للرشكات‪ .‬وتشري تقديرات‬ ‫مُيكن أن ت ُحقّق مكاسب ترتاوح بني ‪4‬‬ ‫جديدة للبنك الدويل إىل أن تونس ُ‬ ‫تظل امليزانية تحت الضغط مع تأثري النشاط‬ ‫و ‪ 5%‬من الناتج املحيل اإلجاميل من خالل تحسني ربط الشحن باملوانئ‬ ‫االقتصادي املحدود عىل عائدات الرضائب‬ ‫وتقليص وقت املكوث يف غضون ‪ 4–3‬سنوات‪ ،‬مع تحقيق مكاسب أكرب‬ ‫عىل املدى الطويل‪ .‬من شأن تعزيز البنية التحتية وخيارات السياسات‬ ‫انخفض عجز امليزانية من ‪ 6.3%‬من الناتج املحيل اإلجاميل يف ‪ 2023‬إىل‬ ‫حسن ربط موانئ تونس وتسهيل التجارة‪ ،‬مام يُتيح تحقيق‬ ‫املختلفة أن يُ ّ‬ ‫وض انخفاض منو النفقات املتزايدة األقل من‬ ‫‪ 5.8%‬يف ‪ ،2024‬حيث ع ّ‬ ‫مكاسب اقتصادية كبرية‪ .‬ومن بني هذه الخيارات توسيع برنامج املتعامل‬ ‫املتوقع يف اإليرادات الرضيبية‪ .‬وكان أداء الرضائب غري املبارشة أسوأ من‬ ‫االقتصادي املعتمد‪ ،‬والذي من شأنه‪ ،‬وفقًا لتحليلنا‪ ،‬أن يُسهم يف خلق ‪94‬‬ ‫الرضائب املبارشة‪ ،‬مام يعكس تأثري بيئة النمو املحدودة‪ .‬وقد أدى استمرار‬ ‫ألف موطن شغل وزيادة كتلة األجور للرشكات مبا يعادل ‪ 0.8%‬من الناتج‬ ‫ضغط األجور‪ ،‬من ‪ 15.1%‬من الناتج املحيل اإلجاميل يف عام ‪ 2022‬إىل‬ ‫املحيل اإلجاميل‪.‬‬ ‫‪ 13.4%‬يف ‪ ،2024‬وتوقف الدعم‪ ،‬إىل الحد من منو ا نفقات امليزانية‪ .‬ومن‬ ‫‪xviii‬‬ ‫‪TUNISIA ECONOMIC MONITOR – BETTER CONNECTIVITY TO GROW‬‬ A PART RECENT ECONOMIC DEVELOPMENTS The Tunisian economy grew 1.  growth of the economy in 2024. While rainfall lev- moderately in 2024, pushed by els in 2024 were higher than in 2023, they were still the partial recovery of agriculture below historical averages, contributing to protracted and tourism but weighed down by water scarcity, with dams’ filling rates below 30 percent oil, mining and manufacturing throughout the year. This reduced agricultural produc- tivity and yields as most agriculture is rainfed in Tuni- The Tunisian economy grew moderately in 2024 sia and irrigation was restricted. As a result, in 2024 after stagnating in 2023 and it remains below its agriculture recovered less than half of the losses expe- pre-Covid level. The economy grew by 1.4 percent in rienced in 2023, when sectoral GDP fell by 16.1 percent real terms in 2024, with a slight uptick in the second (Figure 3). This is compounded by the negative growth half of the year, which allowed the economy to reach of three key sectors, accounting for 9.0 percent of GDP the same pre-Covid level in the last quarter (Figure 1). and for –0.6 percentage point of GDP growth in 2024 Despite this, the GDP in 2024 remains 0.8 percent (Figure 4). The first is oil and gas (–18.1 percent), whose below its pre-Covid level. Continued below average production continues a decade-long decline due to the rainfall, limited domestic and external demand and phasing out of various fields and lack of new invest- challenging financing conditions slowed down an ments. The second is textile and garments (–5.2 per- economic recovery marred by continued regulatory cent), whose exports contracted by 4.9 percent mainly as barriers to growth.1 The Tunisian economy continues a result of the decline in the European Union’s demand, to be diverging from the trajectory of its neighbors (Figure 2) and Tunisia’s real GDP in 2024 is still below 1 See the 2022 and 2023 issues of the Tunisia Economic that pre-pandemic.2 The protracted slow recovery has Monitor. 2 GDP in 2024 in comparator countries ranges between also reduced Tunisia’s potential growth.3 9 percent (Morocco) and 21 percent (Egypt) above pre- The limited recovery of agriculture along Covid level. with the modest performance of oil and gas, man- 3 The average growth potential in 2022–24 is 60 percent ufacturing and construction sectors dragged the the average in 2017–19. 1 FIGURE 1 • Tunisia’s Elusive Economic Recovery FIGURE 2 • Tunisian Economy is Diverging from (Quarterly GDP, constant 2015 TD) Regional Peers (GDP constant prices; 2019=100) 2019 24,200 2019 120 Egypt 24,000 2024 2022 115 23,800 2023 Jordan 2023 110 23,600 2022 Morocco 2021 105 23,400 Algeria 100 23,200 Tunisia 23,000 95 22,800 90 Q1 Q2 Q3 Q4 2019 2020 2021 2022 2023 2024 Source: Tunisia’s National Statistics Institute (INS). Source: World Bank Macro-Poverty outlooks. FIGURE 3 • Agriculture’s Recovery has Been FIGURE 4 • Hydrocarbons, Garments and Modest After the 2023 Drop Construction Dragged Growth in 2024 (Agriculture value-added, 4-quarters (Half yearly GDP in constant 2015 moving average, TD mln constant prices; 2019=100) prices and share in GDP) 125 3,400 16% Oil and gas 115 3,200 15% 105 Garments 3,000 Value added (mTND) Construction (left axis) 14% 95 2,800 13% 85 2,600 12% 75 2,400 65 2,200 Share in GDP 11% (right axis) 55 Hotel/Resto 2,000 10% Q4_10 Q3_11 Q2_12 Q1_13 Q4_13 Q3_14 Q2_15 Q1_16 Q4_16 Q3_17 Q2_18 Q1_19 Q4_19 Q3_20 Q2_21 Q1_22 Q4_22 Q3_23 Q2_24 45 S1-2021 S2-2021 S1-2022 S2-2022 S1-2023 S2-2023 S1-2024 S2-2024 Source: INS and World Bank calculations. Source: INS and World Bank calculations. Tunisia’s main export market. And the third is construc- subdued relative to the pre-Covid period. In the third tion (–1.8 percent), affected by the limited domestic quarter of 2024 (last available data), unemployment demand, both private and public, and by the challeng- increased slightly to 16 percent up from 15.8 percent ing financing environment. The continued recovery of a year before. This marks the 7th consecutive quarter tourism—reflected in the growth of hotels, restaurants of year-on-year increase, and it leaves the unemploy- and café (+6.8 percent)—helped maintain some posi- ment rate almost a percentage point above its pre- tive growth rate, although it could not compensate the Covid rate on an annual basis (Figure 5). At the same under-performance of most of the rest of the economy. time, the labor force participation rate increased to The limited recovery continued to weigh on 46.2 percent in Q3-2024 (up a percentage point a year the labor market, whose performance remains earlier). However, it still hovers 1.2 percentage point 2 TUNISIA ECONOMIC MONITOR – BETTER CONNECTIVITY TO GROW below the pre-Covid rate on an annual basis, suggest- FIGURE 5 • Flattening Labor Participation and ing a higher number of discouraged workers. Women Unemployment (Percent, 4-quarter moving average) continue to suffer a large penalty in the labor market, with an unemployment rate 61 percent higher than 18.0 48.0 that of men and a participation rate only 43 percent that of men in the year ending in Q3-2024. In particu- 17.5 47.5 Labor part. rate lar, the structurally low female labor force participation (right axis) (FLFP) constrains economic growth and the function- 17.0 47.0 ing of labor market in Tunisia (Box 1). 16.5 46.5 The current account deficit 2.  16.0 46.0 continued to moderate easing some of the pressure on external 15.5 Unemployment 45.5 financing 15.0 45.0 Q3-20 16 Q1-20 17 Q3-2017 Q1-20 18 Q3-20 18 Q1-2019 Q3-20 19 Q1-20 20 Q3-2020 Q1-20 21 Q3-20 21 Q1-2022 Q3-20 22 Q1-20 23 Q3-2023 Q1-20 24 Tunisia’s merchandise trade deficit widened in recent months as exports declined and imports increased. The trade deficit widened significantly in the Source: World Bank staff calculations based on INS. BOX 1: EXPANDING AFFORDABLE AND QUALITY CHILDCARE SERVICES COULD RAISE FLFP IN TUNISIA, WITH POTENTIALLY SIGNIFICANT IMPACTS ON ECONOMIC GROWTH Female labor force participation rate (FLFP) in Tunisia remains low despite improvements in education and legal rights and this hampers economic growth prospects. Despite significant improvements in GDP per capita, educational attainment, and legal rights, FLFP only increased from 22.3 percent in 1991 to 27.0 percent in 2023. For example, Tunisia’s score of the Women, Business, and the Law (WBL) index, which measures the extent to which a country’s legal framework creates equal economic opportunities for women, improved from 53.1 in 1991 to 64.4 in 2023. However, Tunisia’s FLFP remains below the rate prevalent among countries at similar level of economic development (figure 6). This matters not only for the fairness of society, but also for the economy, which would benefit from an increase in the labor force and its related skills. A recent modelling exercise suggests that increasing Tunisia’s FLFP to the average level of lower- middle-income countries by 2030 could enhance annual potential growth by 0.52 percentage points, resulting in cumulative GDP growth of 24 percent over the period from 2024 to 2030.a Marriage and parenthood significantly are key factors that decrease FLFP, suggesting policy directions to smoothen these transitions. The participation rate of women without children reaches close to 70 percent before age 30, and it stays around 60 percent up to age 40, whereas women’s participation with children diverges around age 20 and never exceeds 40 percent (Figure 7). Conversely, the labor supply is higher for fathers compared to non-fathers (conditional on age). While education generally enhances labor force participation, the presence of young children is negatively correlated with FLFP across all education levels, with a more pronounced effect among highly educated women.b Policies to help with this marriage/childbearing transition can significantly raise FLFP, including strengthening childcare options, the lack of which is perceived as the primary barrier to women’s workforce entry in Tunisia. In fact, only 1 percent of Tunisian children under 3 years old and 50 percent of children aged 3–6 attend formal childcare. In this context, the government’s initiatives to expand quality childcare access appear important, although key regulations are still pending adoption. The Tunisian Ministry of Family, Women, Children, and the Elderly (MoW) has launched initiatives to improve childcare services. However, key regulations are still pending adoption, and current childcare facilities are insufficient, with only 461 nurseries available for children under 3. Accelerating the implementation of existing programs, investing in nurseries located in employment hubs and underserved areas, and encouraging public-private partnerships remain critical actions. Subsidy vouchers could alleviate the cost of childcare for low-income family. Enhancing training programs for childcare providers is also critical to ensure high-quality early education, a significant challenge in Tunisian childcare. Effective uptake requires services that overcome barriers such as location, hours, cost, and cultural norms, and must be tailored to regional specifics. Moreover, harmonizing parental leave for both parents, including by extending paternal leave to fathers would also be effective at raising FLFP. While there has been a reform project on paternal leave since 2017, the current paternal leave remains limited to two days for both the private and public sectors, with little clarity on the timeline for and enforcement of these reforms. (continued on next page) Recent economic Developments 3 BOX 1: EXPANDING AFFORDABLE AND QUALITY CHILDCARE SERVICES COULD RAISE FLFP IN TUNISIA, WITH POTENTIALLY SIGNIFICANT IMPACTS ON ECONOMIC GROWTH (continued) Tunisia has a Lower FLFP than Most Countries at Similar Level of Economic FIGURE 6 •  Development (Female Labor force participation, percent and GDP per capita, log US$) MDG SLB 80 BDI MOZ ETHTZA AGO LBR KEN MDA KHM ISL UGA COG CMR VNM GHA BTN PER AZE KAZ BHS NZL CAF COD MWI LCA MAC SGP NER HTI CHN SWE AUS NLDNORCHE QAT 60 ZWE VUT TLS JAM PRY BWATHA BLR BRB ARM ISR CAN GBR DNK IRLLUX BFA GMBLSO TGO BEN CIV BOL LAO NAM GEO URY RUS SVK EST CYP LTU FINAUT DEU USA BRN RWA ZMB KGZ ECUIDN VCT LVA SVN PRTESP KOR JPN MLT HKG ARE MYS HUN FLFP (Percent) SLE NGA MNG ZAFBRA ALB COL CZEFRA TCD GNB MLI HND NICCPV BLZ GNQ DOM CRI BGR PAN POL ARG SRB BEL PNG SWZ UKRTKM MNETTOCHL HRV KWT PHL SLV SUR MEX GRC BHR GIN TON MKD MMR WSM ROU 40 SEN STP BGD UZBGTM FJI GAB BIH MDV MUS GUY ITA COM TJK LBY SAU LKA TUR PRI SDN OMN NPL IND LBN MRT PAK TUN 20 SOM MAR DJI PSE DZA AFG JOR EGY IRN IRQ 0 6 8 10 12 Log − GDP per capita (2017 PPP) Source: World Development Indicators, World Bank. FIGURE 7 • Having Children Decreases Labor Participation for Women but it Increases it for Men (Labor force participation, percent and age, by parenthood status) Women Men 100 100 80 80 60 60 (Percent) (Percent) 40 40 20 20 0 0 20 25 30 35 40 45 50 55 60 65 20 25 30 35 40 45 50 55 60 65 Age Age No children Child 0–5 Source: Authors’ calculations based on the 2022/23 Labor Force Survey (ENPE) data, INS. a Kose, M. Ayhan, and Franziska Ohnsorge. 2024. Falling long-term growth prospects: trends, expectations, and policies. World Bank Publications. b The probability of entering the labor market decreases by 3.3 percent for uneducated, 6.7 percent for primary-educated, 6.9 percent for secondary- educated, and 8.9 percent for tertiary-educated women. 4 TUNISIA ECONOMIC MONITOR – BETTER CONNECTIVITY TO GROW FIGURE 8 • Garments and Mechanic Industries FIGURE 9 • Rising Import Quantities have Driven Drove Down the 2024 Trade Balance the Expansion of the Trade Deficit Compensated by the Shrinking Deficit (Annual percent change) of Agriculture (Annual trade balance by sector, 13% percent of GDP) 3 8% –2 3% –7 –2% –12 –17 –7% –22 –12% 2022 2023 2024 Exports Imports Exports Imports Garment Mining Agriculture 2024 2023 Energy Mechanical and electrical Other manuf. Trade balance Unit value Quantity Value Source: World Bank staff elaboration based on INS data. Source: World Bank staff elaboration based on INS data. last quarter of 2024, causing an expansion by 10.9 per- ing olive oil exports (Figure 8). Tunisia’s trade bal- cent in nominal terms for the whole of 2024 over 2023. ance in 2024 benefited overall from improved terms of However, it remained stable as a share of GDP at trade, although the improvement was not as large as a 11.4 percent, as in 2023. The widening continued in the year before (Figure 9). In 2024, average import prices first quarter of 2025, when the trade deficit increased declined by 11 percent over 2023, while export prices by two thirds relative to the same period in 2024, decreased by 2 percent on average. However, these accounting for 2.8 percent of GDP (up from 1.8 per- price trends were compensated by opposite trends in cent in 2024). The widening deficit has been driven by quantities. As a result, export values did not change a slowdown in exports, which stalled in 2024 (vis-à-vis while imports increased by 2.3 percent. 2023) and declined by 5.9 percent in the first 3 months The energy deficit widened further on the of 2025. This is an inversion of the previous trend, when back of rising import prices, continuing to account the trade deficit shrank by two third after the adverse for the bulk of the merchandise trade deficit. terms of trade shock due to the war in Ukraine in 2022. In 2024 the average price of imported oil by Tunisia The surge in agricultural exports compen- increased by 1.4 percent, and for gas (imported from sated the deterioration of the trade balance of Algeria), the increase was 19 percent. As a result, the garments and mechanic industries. The trade def- energy independence rate, which represents the ratio icit expanded mainly as the result of the deterioration of primary energy resources to primary consumption, of the trade balance in garments and mechanical and declined to 41 percent in 2024, down from 48 percent in electrical industries, both of which suffered from a 2023. As the quantities imported rose by 1 percent, the reduction in demand in their main EU market (figure 8). value of imports grew by 6 percent. This led the energy The deficit of mechanical and electrical industries trade balance to deteriorate by 12.5 percent, account- also deteriorated because of a 22 percent increase in ing for 57.4 percent of the merchandise trade deficit in motor vehicle imports (driven by a 17 percent increase 2024 (up from 56.6 percent a year earlier). This share in quantity). These trends were countered by the defi- has more than doubled since 2017, making the recent cit reduction of agriculture (from 1.5 percent of GDP in development of renewable energy projects particularly 2023 and 0.2 percent in 2024) mainly thanks to boom- important not only for Tunisia’s energy security but also Recent economic Developments 5 FIGURE 10 • The Trade Deficit Along with Services FIGURE 11 • A Declining Share of Gross External Surplus Helped Reduce the Current Budgetary Needs Estimated in the Account Deficit in Recent Periods Budget have been Mobilized (Percent GDP) (Percent) 20 0 160 9 15 140 8 –2 10 7 120 5 –4 % GDP (rhs) 6 100 0 5 –6 –5 80 4 –10 –8 60 3 –15 40 –10 2 –20 % Budget 20 1 –25 –12 2018 2019 2020 2021 2022 2023 2024 0 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Primary and secondary Services Goods Current account (rhs) Source: World Bank staff estimates based on Central Bank of Tunisia data. Source: World Bank staff estimates based on Central Bank of Tunisia data. for its external balance (see Tunisia Economic Monitor, Tunisia’s increasing reliance 3.  Spring 2024 issue. on domestic sources to fill the The stability of the trade deficit and the external financing gap, which are increase in the services surplus reduced the cur- declining from a high peak, would rent account deficit (CAD) in 2024. The travel service present medium-term risks to balance—which accounts for a quarter of the services currency and price stability trade balance—increased by 17 percent in 2024 (com- pared to 2023). This added to the post-Covid tourism Amid tightening financing conditions among bilat- recovery, with the travel balance being 3.5 times larger eral and multilateral lenders, Tunisia continues than in 2020. In 2024, however, tourism’s contribution to face challenges in meeting its gross external to GDP was still below its pre-Covid level (3.3 versus financing needs. This tightening is reflected in the 4.1 percent). Workers’ remittances were even higher declining share of external budgetary needs eventu- than tourism receipts (9.8 billion dinars, or 5.9 percent ally financed by the end of the year. In 2024 only a of GDP, versus 4.8 percent for tourism), remaining an fifth of the external needs forecast in the Budget Law essential source of foreign currency for Tunisia. These was eventually covered, while in 2018–2019 the share flows and the stability of the trade deficit offset capital covered was 93.4 percent on average (Figure 11). income (3.9 percent of GDP). As a result, the CAD nar- While the external financing needs are declining from rowed to 1.7 percent of GDP, compared with 2.3 per cent the peak of 2022, alternative sources of funding con- of GDP in 2023 and 8.8 per cent in 2022 (Figure 10). tinue to be either inaccessible (international private While the lower CAD eases the pressure on financing),5 or limited, as is the case for foreign direct gross external financing needs, the latter remain significant especially due to the burdensome debt service. Despite the reduced CAD, external financing 4 External financing needs are defined as current account needs remained significant in 2024 (TD 4.7 billion, deficit + debt (public + private) reimbursement. 5 The Tunisian government has not been able to or 8.8 percent of GDP) with amortization accounting issue foreign-denominated bonds since 2019, as its for 81.3 percent.4 These needs rose by 11 percent in sovereign credit rating has been consistently assessed 2024 compared to 2023, most of which (73 percent) as noninvestment grade (including by Moody’s, Fitch again due to debt reimbursement. Ratings and Rating and Investment Information). 6 TUNISIA ECONOMIC MONITOR – BETTER CONNECTIVITY TO GROW Limited FDI, Portfolio and Capital FIGURE 12 •  FIGURE 13 • The Decline in Reserves is Flows put Pressure on Tunisia’s Associated with a Widening CAD Financing of its External Needs, Which (million TND) are Declining from the 2022 Peaks (Percent GDP) 6,000 Quarter on quarter change in reserves (TND mln) 2019 Q3 9% 8% 4,000 2023 Q3 7% 6% 2,000 2018 Q4 5% 4% 0 3% 2022 Q4 2% 2019 Q2 –2,000 2021 Q1 1% 0% H1-09 H1-10 H1-11 H1-12 H1-13 H1-14 H1-15 H1-16 H1-17 H1-18 H1-19 H1-20 H1-21 H1-22 H1-23 H1-24 2024 Q1 –4,000 –15,000 –10,000 –5,000 0 Capital FDI Portfolio Ext. fin. needs Quarterly current account balance (TND mln) Source: Authors’ elaboration on Central Bank of Tunisia data. Source: Authors’ elaboration on Central Bank of Tunisia data. investments (FDI), portfolio and capital account flows reserves to reimburse external debt,7 along with the (Figure 12). Portfolio and capital account flows are vir- widening trade deficit contributed to reduce foreign tually absent in Tunisia mainly as the country maintains exchange reserves to below 100 days of import cover strict controls on capital outflows. FDI is more signifi- (99 days on March 21st) for the first time in two years. cant, and it increased by 10 percent in 2024, though This compares against 121 days at the beginning of it only covers 17 percent of external financing needs. the year. This level still provides a buffer vis-à-vis both With shrinking sovereign financing, the shift imports and short-term external debt repayment, help- towards domestic sources to cover its external ing to explain why the Dinar has remained stable in needs has accelerated, notably through monetary the face of large recent reimbursements. At the same financing. The 2025 Budget Law authorized the Cen- time, the decline in reserves signals that if protracted, tral Bank to lend to the government directly up to 7 bil- the use of monetary financing of the external debt lion dinars (4.1 percent of GDP) in 2025, to be repaid could carry some challenges to currency and price over 15 years without interest. The Government used stability. That is particularly the case if the trade defi- this facility drawing on foreign reserves to repay exter- cit – the largest component of the CAD - continues to nal debt, including a US$1 bn loan (1.9 percent of GDP) expand as in the past months. Going back to 2018, to the international financial market. A similar financ- a widening CAD has been associated with depleting ing facility for the same amount was also instituted reserves in Tunisia (figure 13). in 2024, which the government used largely to repay external debt service obligations. The timely repayment of the external debt, the declining debt level to interna- 6 This improvement comes after the improved Long-Term tional capital markets and the improvement in the CAD Foreign-Currency Issuer rating by Fitch (from CCC-to prompted Moody’s to upgrade Tunisia’s long-term sover- CCC+). Despite these improvements, the ratings of eign rating from “Caa2” to “Caa1” with a stable outlook.6 Tunisia’s bond still indicate a significant risk of default. Hence Tunisia continues to be unable to tap into While the Dinar has remained stable over- international financial markets. all, the recent decline in foreign reserves follow- 7 This included a US$1 bn loan (1.9 percent of GDP) ing their use for debt reimbursement underscores reimbursement to the international financial market in the pressure on external balances. The use of January. Recent economic Developments 7 FIGURE 14 • Tunisia Increasingly Relies on FIGURE 15 • The Share of Net Government Domestic Financing of the Debt Receivables in Total Credits (Domestic debt, % of total debt and Continues to Increase (and TD mln) Accelerates) as Receivables to the Economy Growth Falters 60 (Year-on-year percent increase, six Domestic debt (% total debt) month moving average) 55 40% Share of govt in 10% 50 total credit (left axis) 9% 45 35% 8% 7% 40 30% 6% 35 5% 25% 4% 30 Domestic debt (% GDP) yr-o-yr growth in 3% 20% credit to the 2% 25 2021 2022 2023 2024 2025 economy (budget law) (right axis) 1% Source: Central Bank of Tunisia and Ministry of Finance. 15% 0% Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Source: Central Bank of Tunisia. The rising domestic financing of 4.  the public debt has increased the sovereign-banking nexus with While the growth of credit to the economy potential effects on the credit started again to increase in 2024, the sustained market use of local funding to finance public debt can stifle that growth. The injection of liquidity through Given the challenging external financing envi- refinancing operations is directing bank liquidity ronment and the rising public debt, the domestic towards government lending, which is likely to crowd banking system has continued to increase its role out credit to the rest of the economy. In the last year in sovereign debt financing. As access to external through August 2024 the banking sector’s exposure financing became more limited, the nominal domestic to the State grew at an annual rate of 39 percent. As a debt stock rose rapidly over the past few years, mov- result, the share of central government in total claims ing from TND 24.7 billion in 2019 to TND 72.7 billion of the banking sector increased from 26.8 percent in in 2024. In parallel, the public debt grew rapidly as a August 2022 to 40.8 percent in August 2024, almost result of rising public expenditures and the decelera- 3 times the average in 2015 (14.4 percent) (figure 15). tion of the economy: from 67.8 percent of GDP in 2019 This long-term trend of rising share of claims to the to 84.6 percent in 2023, before declining to 81.2 per- cent in 2024.8 While the recent reduction in debt pro- 8 The debt figure covers only the central government’s vides some respite, financing the debt remains chal- but not SOEs’ debt, much of which is guaranteed by the lenging. As a result, Tunisia has increasingly tapped State as well as payment arrears to public and private into local markets as a financing source so that the companies. share of domestic debt in total debt increased from 9 Refinancing consists of the Central Bank lending money 29.7 percent in 2019 to 53.8 percent in 2024, with a to banks with liquidity needs, generally short-term. They are carried out on the initiative of central banks (through planned increase to 58.3 percent in 2025 according tenders) or banks (lending facilities). While refinancing is to the 2025 Budget Law (Figure 14). This domestic associated with money creation, the relation is not one- financing necessitated a high level of refinancing to to-one as it depends on the terms of the reimbursement local banks by the Central Bank.9 and the loan maturities. 8 TUNISIA ECONOMIC MONITOR – BETTER CONNECTIVITY TO GROW government displaced the credit to the rest of the (April 2025) from 6.9 percent (April 2024) driven in economy, whose 6-monthly average annual growth part by a limited domestic demand given the slow- rate declined from 8.6 to 4.8 percent between during down in economic growth.10 The 10.6 percent decline the same period (Figure 15). While the credit growth in merchandise import prices in 2024 (Figure 9 rate started to rise again in 2024, it remained below above), driven by the drop in international prices of the inflation rate. energy and cereals, compounded this effect.11 At the The constraints to the credit market are same time electricity and gas inflation declined from compounded by the increasing banking expo- 14.9 percent in February 2023 to 0.1 percent in Jan- sure to SOEs and the recent overhaul on the use uary 2025. of bank cheques. A case in point is the Banque However, food inflation is still above its pre- Nationale Agricole (BNA), one of the largest Tuni- Covid average, as water scarcity and some import sian banks, which increased its credits to the Office compression reduced the supply in domestic Des Céréales (OdC) three-fold between 2019 and markets. Food inflation declined in April 2025 to 2024. They now represent more than a third of the 7.3 percent down from 7.3 percent in March. How- overall credit stock of the BNA, a very large single ever, it remains well above the pre-Covid average borrower concentration risk. In addition, the recent (3.7 percent in February 2020), as the rate of price regulation on bank cheques introduced in February increases for food has been consistently higher than 2025 seems to have restricted an important channel average inflation since May 2021 with a widening gap of short-term credit in Tunisia. By aiming to reduce over the past couple of years as water scarcity and the frauds through the use of cheques, the regulation import compression reduced the domestic supply of has sought to limit the conditions in which cheques agricultural products. This presents a significant chal- could be used for payment, thereby restricting their lenge particularly for lower income households, for use as a means of short-term. These conditions may which food accounts for a relatively greater share of amplify the constraints to access to credit, which are expenditures.12 already particularly biting for Tunisian firms. In this With declining inflation and lower growth, context implementing some of the measures pro- the Central Bank reduced its policy rate, the first posed in the 2022 government’s emergency plan, change since December 2022. In March 2025 such as facilitating the use of movable assets as col- the Central Bank’s board decided to reduce the key lateral, could be important to strengthen access to policy rate by 50 basis points to 7.5 percent.13 The credit to the economy. decision was motivated by the reduction in the infla- tion rate and the need to provide the boost to the anemic growth rate of the economy. The real inter- Inflation continued to moderate, 5.  est rate continues to remain positive in the face of having converged to the pre- the rate reduction (Figure 17). At the same time, Covid average, although it remains higher for food products 10 Core inflation is computed by excluding energy and food products from the CPI. Inflation continued to moderate since the peaks 11 That is an average obtained by weighing each 2-digit of two years ago on the back of lower global sector level price change by the corresponding share in prices and limited domestic demand, and it is total Tunisian merchandise import in the first 6 months. now slightly below the pre-Covid rate. Year-on-year 12 According to the 2021 Household Budget survey, the price inflation continued its gradual decline from the share of food in total expenditures is 35.5 percent for record level of February 2023 (10.4 percent), reach- the bottom quintile of the income distribution and 27.2 percent for the top quintile. ing 5.6 percent in April. That is slightly below the 13 Other rates were also cut by the same amount, including month before (5.9 percent), and in line with the pre- the deposit facilities (6.5 percent), the overnight lending Covid rate in February 2020 (Figure 16). This decline facilities (8.5 percent) and the floor savings’ rate followed the reduction in core inflation to 5.5 percent (6.5 percent). Recent economic Developments 9 Inflation Started to Decline in FIGURE 16 •  FIGURE 17 • Real Interest Rate is at the Highest 2023 and has Now Converged to its Level since March 2021 pre-Covid Average (Real interest, inflation and policy (Year-on-year percent increase) rates, in percent) 16% 11% 3% Food inflation 14% 10% 2% 12% 9% 1% 10% CPI 8% 0% 8% 7% –1% Core inflation 5% –2% 6% 5% –3% 4% 4% –4% Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Jul-22 Sep-22 Nov-22 Jan-23 Mar-23 May-23 Jul-23 Sep-23 Nov-23 Jan-24 Mar-24 May-24 Jul-24 Sep-24 Nov-24 Jan-25 Mar-25 2% 0% Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23 Jul-23 Jan-24 Jul-24 Jan-25 Real interest rate (rhs) CPI Policy rate Source: Central Bank of Tunisia. Source: World Bank estimates based on INS and OECD. the Central Bank points to continuing pressures BL24, weighted down overall tax revenues. Revenues on prices, particularly for food, with products such from VAT (7.6 percent growth vs. 12.7 percent in the as fresh food experiencing high inflation (15.0 per- BL24) and excises (4.6 percent vs. 14.7 percent) were cent in March 2025).14 Achieving the decline in infla- particularly subdued, consistently with the effect of the tion rate forecast by the Bank for 2025 (5.3 percent) economic growth slowdown, with lower demand for would require careful consideration in monetary pol- consumption and investments. Direct taxes showed icy choices going forward, including through policy greater resilience (+11.1 percent), mainly thanks to rate changes. the increased profitability of the hydrocarbon sector due to higher energy prices. While this translated into higher corporate income taxes (CIT), tax revenues The budget continues to be 6.  on income, notably wages, continue to be more than under pressure as the low twice the revenues from CIT. This reflects the higher growth affects tax revenues tax burden that labor income faces relative to capi- tal income in Tunisia, which is a source of distortion The budget deficit declined slightly in 2024 and potential inequality in the economy (see Tunisia (6.2 percent of GDP) as the reduced growth in Economic Monitor, Fall 2024). expenditures more than compensated the more The continued compression of the wage bill modest than expected increase in tax revenues. and the stalling of subsidies limited the growth of The 2024 budget execution shows that tax revenues public expenditures. Overall expenditures grew by grew by 9.7 percent in 2024 compared to 2023. That 4.6 percent in 2024, which is below both the growth rate is below the 2024 Budget Law’s (BL24) projection in 2023 (6.5 percent) and that predicted by the BL24 (16 percent) but higher than the 2023 growth rate (6.7 percent). The main factor behind the lower-than- (7.3 percent) (figure 18) and the inflation rate for 2024 expected growth is the wage bill, which accounts for (7 percent). As a result, tax revenues accounted for around 40 percent of expenditures, and which grew by 25.1 percent of GDP, slightly below the 2023 share 2.6 percent in 2024 (against 4.1 percent expected by the (25.4 percent) and the BL24 forecasts (25.6 per- cent). The comparatively modest performance of indi- 14 Source: Press Release from the CBT’s Board meeting, rect taxes, which grew half the rate forecast in the March 26, 2025. 10 TUNISIA ECONOMIC MONITOR – BETTER CONNECTIVITY TO GROW FIGURE 18 • Tax Revenues under-Performed in FIGURE 19 • The Public Wage Bill Compression 2024 Relatively to the Expectations Contained Public Expenditures a Year Earlier Growth (Year-on-year percent change) (Percent of GDP) 18% 37% 16% Public expenditures 14% 32% 12% 10% 27% 8% 6% 22% 4% 2% 17% 0% Public wage bill Total Direct Indirect VAT Customs Excises 2023 BL24 2024 12% 2017 2018 2019 2020 2021 2022 2023 2024 Source: Tunisia’s Ministry of Finance. Source: Tunisia’s Ministry of Finance. BL 24). While Tunisia still has a high public wage bill by prices for basic goods and services below cost recov- international standards, this declined from 15.1 percent ery. These measures crowded out public investments of GDP in 2022 to 13.4 percent in 2024, driving public by the government, with crucial infrastructure, such as expenditures down from 36.5 percent to 34.6 percent ports remaining under-funded (see Part B). Reversing of GDP during the same period (figure 19). The relative this decline in capital expenditures is crucial to help compression of the wage bill follows the agreement revive Tunisia’s growth trajectory and improve public between the government and the trade union (UGTT) in services to the citizens. October 2022 and the continued freeze of public sec- tor recruitment. Subsidy expenditures remained stable in nominal terms, and they declined from 7.7 percent Assuming drought conditions ease, 7.  of GDP in 2023 to 6.8 percent in 2024, further con- we expect a moderate growth tributing to the moderation of expenditure growth. This uptick in 2025–27 assuming but includes a reduction in energy subsidies from 4.4 per- downward risks remain elevated cent to 4.0 percent of GDP, driven by the reduction in We expect the economy to grow by 1.9 percent in international prices. On the other hand, interest pay- 2025, assuming continued improvement in rain- ment experienced a higher growth than overall expen- fall and a delayed recovery of the manufactur- ditures in 2024 (+8.0%) mainly as a result of increased ing sector. The improved rainfall with the increase in domestic interests. dams’ filling rate is expected to help the agricultural Reversing the decline in public capital sector recover fully the losses of 2023. However, the expenditures would help revive economic growth. rising global trade uncertainty could impact the econ- While capital expenditures increased by 7.8 percent in omy through lower external demand, particularly in 2024, it slightly declined as a percent of GDP (from the EU—the main destination of Tunisian exports.15 3.7 percent in 2023 to 3.6 percent in 2024), and it remained well below the level of 2016 (6.0 percent 15 However the direct effect of trade uncertainty on of GDP). With slowing economic growth and employ- Tunisian manufacturing is unlikely to be significant as ment creation, successive governments over the past the US accounts only for 3.2 percent of overall Tunisian decade have increased recurrent public expenditures exports and US exports are equivalent to 1.2 percent of to provide public employment and to keep market Tunisia’s GDP. Recent economic Developments 11 All of these would reduce the growth of the economy, get deficit is expected to decline slightly to 5.8 per particularly that of manufacturing, which we expect to cent of GDP in 2025 (from 6.2 percent in 2024) as still be negative in 2025. This would in turn decrease the growth of subsidies remains subdued, capital somewhat services growth through backward and for- expenditures decline and tax revenues increase, sup- ward linkages. ported by some increases in some tax rates, particu- Growth is eventually expected to stabilize at larly the CIT. The CAD is projected to increase slightly around 1.6–1.7 percent in 2026–27, but the fore- to 1.8 percent of GDP in 2025 with a widening of the casts are subject to significant downside risks. trade deficit also due to the trade uncertainty, partly The forecast is based on the convergence in sectoral compensated by the moderate growth in tourism and growth rate to their medium-term rate. However, ris- the expected decline in oil prices. With FDI projected ing global trade uncertainty, limited external financing to increase somewhat, albeit from a low base and min- conditions and a further deterioration of water avail- imal portfolio investments, external borrowing would ability could raise growth and macroeconomic sta- remain an important source of financing of the current bility challenges for Tunisia. If the increase in trade account as well as of debt reimbursement. uncertainty escalated, this could further jeopardize The financing of the deficits could require global as well as Tunisian partners’ economic pros- a scale-up of the external financing and more pects. In addition, if external financing conditions did reforms in the face of the significant debt reim- not improve, it may be challenging to secure sufficient bursement schedule in the near term. Despite the foreign currency in the economy, which could lead lower deficit, gross financing needs are expected to pressures on exchange rate and prices, exerting to be stable in nominal terms in 2025 (TD 28 bn, or a negative impact on economic activity and employ- 15.6 percent of GDP) due to rising debt reimburse- ment. Medium-term prospects would improve mark- ment. Two-thirds of the financing is expected to be edly if Tunisia took steps toward strengthening fiscal amortization, almost half of which external. Financ- policies, modernizing SOEs and fostering greater ing the deficit will continue to be challenging given domestic competition. the strategy of limiting external indebtedness and con- While the macroeconomic situation is straints to monetary financing. Given the paucity of expected to stabilize, Tunisia’s public finance other financial inflows as described above, sovereign and external position will remain vulnerable in the lending would have to cover most external financing absence of sufficient external financing and prog- needs if Tunisia were to avoid the dependence on ress in the economy’s modernization. The bud- monetary financing of the budget through reserves. 12 TUNISIA ECONOMIC MONITOR – BETTER CONNECTIVITY TO GROW TABLE 1 • Key Macroeconomic Indicators, 2022–27 Variable 2022 (A) 2023 (A) 2024 (A) 2025 (F) 2026 (F) 2027 (F) Real GDP Growth, at constant market prices 2.7 0.0 1.4 1.9 1.6 1.7 Private Consumption 2.0 –1.9 4.1 4.4 4.1 4.2 Government Consumption 1.2 –2.4 –1.1 4.7 4.4 3.1 Gross Fixed Capital Formation 2.1 –7.5 1.5 1.7 1.4 –0.3 Exports, Goods and Services 17.3 10.5 –0.8 1.6 1.5 1.6 Imports, Goods and Services 11.6 5.6 4.4 6.1 5.9 5.1 Real GDP Growth, at constant factor prices 2.6 –0.1 1.2 1.9 1.6 1.7 Agriculture 1.9 –16.1 8.3 8.3 0.9 0.6 Industry 0.7 –1.0 –2.5 –1.7 –0.8 –0.6 Services 3.4 2.7 1.6 2.3 2.6 2.6 Inflation (Consumer Price Index, period average) 8.3 9.3 7.0 5.5 5.0 5.0 Current Account Balance (% of GDP) –8.8 –2.3 –1.7 –1.8 –2.0 –2.4 Net Foreign Direct Investment, Inflow (% of GDP) –1.3 –1.5 –1.4 –1.5 –1.5 –1.6 Fiscal Balance (% of GDP) –6.9 –7.3 –6.2 –5.8 –5.6 –5.5 Revenues (% of GDP) 29.6 29.1 28.4 28.0 27.9 27.8 Expenditures (% of GDP) 36.5 36.3 34.6 33.8 33.6 33.4 Primary Balance (% of GDP) –3.6 –3.4 –2.4 –1.8 –1.5 –1.1 Gross financing needs of the Central Government (%GDP) 13.1 12.7 16.0 15.6 17.4 19.8 Debt (% of GDP) 82.3 84.6 81.2 82.1 83.0 85.5 * The figures for 2022–2024 are based on government data; 2025–27 are based on World Bank staff forecast. Recent economic Developments 13 B PART IMPROVING PORTS TO SUPPORT TUNISIA’S DEVELOPMENT AND GROWTH Summary As a relatively small open economy, the performance of the port sector is crucial to the Tunisian economy. Efficient ports offer the chance to leverage Tunisia’s location along the Gibraltar-Suez shipping lane, which accounts for over a third of containerized traffic in the world. While Tunisian ports handle different cargo types, containers account for a low share of volumes as Tunisia’s legacy equipment and infrastructure constraints have limited container shipping configurations. Tunisia’s ports are relatively well equipped for roll-on/roll-off (Ro-Ro) units, but not for container cargo handling. They are also small and shallow compared to other Mediterranean ports, which aligns with Ro-Ro traffic but affects connectivity, congestion, and operating efficiency for contain- ers. Despite some advantages of Ro-Ro over short distances, the lack of development of container shipping has constrained Tunisia’s connectivity to wider global markets. The equipment and infrastructure constraints are compounded by cumbersome physical and documen- tary checks, and trade and foreign currency requirements, which slow down goods’ processing in ports. Partly as a result of these inefficiencies, the main Tunisian port of Rades has one of the highest waiting time of imported containers among African ports, which raises firms’ logistics and inventory costs. New World Bank estimates suggest that Tunisia could gain 4–5 percent of GDP from higher port ship- ping connectivity and reduced dwell time within 3–4 years, with larger gains in the long-run. Various infrastruc- ture strengthening and policy options would improve Tunisia’s port connectivity and trade facilitation, enabling such large economic gains. 15 FIGURE 20 • Hydrocarbons and Cereals Account FIGURE 21 • Tunisia’s Container Port Traffic Lags for More than Half of Volumes its North African Neighbors Traded in Tunisian Ports Container port traffic (TEU: 20 foot Share of cargo handled by Tunisia’s equivalent units) ports (metric tons in 2023) 9,000,000 Rolling units Bulk liquid 8,000,000 8% 3% 7,000,000 Egypt 6,000,000 Solid bulk 5,000,000 21% Hydrocarbons Morocco 35% 4,000,000 3,000,000 2,000,000 Algeria Containers 1,000,000 Tunisia Cereals 16% 17% 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: World Bank analysis of OMMP data; https://www.ommp.nat.tn/import-export/. Source: UN Data. As a relatively small open economy, the over 52 percent of the volumes handled by Tunisian performance of the port sector is crucial to the 8 main commercial ports in 2023, mainly through Tunisian economy. An efficient port sector is key to the ports of Skhira, Bizerte (hydrocarbons), Sfax and connecting Tunisian firms with the rest of the world, Rades (cereals) (Figure 20). Container traffic is con- enabling the economy to access markets for prod- centrated in Rades and accounted for only 16 percent ucts and inputs more efficiently, predictably and eco- of volumes, despite containers being the main type of nomically. An efficient port sector will help Tunisia cargo handling merchandise trade globally. The vol- integrate into regional and global value chains, gen- ume of container traffic handled by Tunisian ports erating income and employment gains and reducing has been persistently low compared to other ports in the prices of goods and services for the economy. North Africa (Figure 21). Efficient ports offer the chance to lever- Tunisia’s legacy equipment constraints age Tunisia’s location along a major trade route. have limited container shipping configura- Tunisia’s eight major ports—the largest of which is tions. STAM (Société tunisienne d’acconage et de Rades (Tunis)—collectively handled almost the entirety manutention), a state-owned enterprise, performs of the country’s sea traffic, 29.6 million tons of cargo most stevedoring services at ports along with special- in 2023, with a value of US$ 45.5 billion (88 percent ized SOEs from other line ministries (e.g., Ministry of of GDP). Maritime connections to the EU are the most Agriculture) and private operators. These companies important in the current trade flows, as Tunisia’s ports own most of the equipment at Tunisia’s main ports, are strategically located close to the Gibraltar-Suez shipping lane, one of the most important globally. 16 UNCTAD calculations, based on data from MDS This lane accounted for nearly 37 percent (59.2 mil- Transmodal, World Cargo Database, June 2024 lion TEUs) of containerized traffic in the world in 17 See Moschovou, T.P., & Kapetanakis, D. (2023). A Study of 202216 and it is growing rapidly as traffic in the major the Efficiency of Mediterranean Container Ports: A Data Mediterranean ports more than doubled from 2004 Envelopment Analysis Approach. Civil Engineering, 4(3), to 2020.17 There is ample opportunity for Tunisia to 726–739. The major ports in the Mediterranean are the following: Tanger Med (Morocco), Valencia (Spain) develop its ports and tap into this growing market. Piraeus (Greece) Algeciras (Spain) Barcelona (Spain) Tunisian ports handle different cargo types, Gioia Tauro (Italy) Marsaxlokk (Malta) Genoa (Italy) and containers account for a relatively low share Mersin (Turkey) Alexandria (Egypt) Marseille (France) of volumes. Hydrocarbons and cereals accounted for Sines (Portugal) La Spezia (Italy) Koper (Slovenia). 16 TUNISIA ECONOMIC MONITOR – BETTER CONNECTIVITY TO GROW FIGURE 22 • Shipment Times to Rades are High by Regional Standards Time of shipping a 20-ft container from (Hamburg, Shanghai, or Marseille) to (Alexandria, Rades, Bizerte, Sfax, Casablanca Tangier, or Alger) 50 40 30 Days 20 10 0 Hamburg Shanghai Marseille AICT Rades Tanger Alger Casablanca Source: World Bank staff estimates based on quotations obtained from shipping lines. notably Rades. The latter is well equipped for hori- loading adds additional handling costs, delays, and zontal handling of roll-on/roll-off (Ro-Ro) units, which inventory carrying costs for shippers. The frequency entail wheeled trailer units rolled on and off ships at of service via smaller ships that connect to Tunisia origins and destinations. At the same time, Rades suf- is also low, given the smaller domestic demand and fers from shortages of vertical handling equipment for volumes relative to higher frequency routes served containers, resulting in low productivity of container by larger ships. This results into relatively high time handling relative to Ro-Ro. This leads to congestion and costs of container shipping in Tunisian ports, as in ports and partly explains the large gap in average evident in figure 22, which shows the estimated ship- import dwell time, i.e. the time from the cargo spends ment time of a 20-foot container from 3 main global in the port, between Ro-Ro and containers. For Ro-Ro ports (Hamburg, Marseille and Shanghai) to different cargo the dwell time is 5.5 days, while for imported ports in North Africa. For example, the shipment time containers is 18.5 days.18 The difference also likely from Hamburg/Marseille to Tanger is half of the ship- reflects differences in import composition between ment time to Rades. cargo and Ro-Ro, with the former subject to greater While Ro-Ro offers advantages over short customs controls than products imported through distances, expanding container shipping would Ro-Ro (see below). significantly enhance Tunisia’s connectivity to Tunisia’s ports are also relatively small and global markets. Over short distances in the context shallow compared to other Mediterranean ports, of regular services, Ro-Ro offers many advantages which aligns with Ro-Ro traffic but affects con- relative to containerized transport, such as door-to- nectivity, congestion, and operating efficiency. door speed, avoided container rental, and simpli- The depth of the draft at Tunisian ports that handle fied loading and unloading.19 This has resulted in goods cargoes ranges from 9–11 meters. This is ade- quate for handling Ro-Ro ships and smaller classes of 18 The difference is not as pronounced when exporting, container ships, but insufficient for larger classes of where Ro-Ro averages 1.5 days and container averages ships that dominate international trade. Quay length 1.9 days. 19 Indeed, Ro-Ro is extensively used in other countries and basin area further constrain the use of larger in the MNA region and Europe for routes between ships. As a result, containers in and out of Tunisia typ- Morocco and Europe (Tanger Med-Algésiras), the UK ically transload from larger to smaller ships at one or and France (Dover-Calais), Germany and Sweden more deepwater ports outside Tunisian waters. Trans- (Travemünde-Trelleborg). Improving ports to support Tunisia’s development and growth 17 FIGURE 23 • Tunisia’s Container Port Traffic Lags its North African Neighbors Liner shipping connectivity index 80 Liner Shipping Connectivity Index 70 60 50 40 30 20 10 0 2006Q1 2006Q1 2006Q1 2006Q1 2010Q1 2010Q1 2010Q1 2010Q1 2010Q1 2010Q1 2010Q1 2010Q1 2010Q1 2010Q1 2020Q1 2020Q1 2020Q1 2020Q1 2006Q3 2006Q3 2006Q3 2006Q3 2010Q3 2010Q3 2010Q3 2010Q3 2010Q3 2010Q3 2010Q3 2010Q3 2010Q3 2010Q3 2020Q3 2020Q3 2020Q3 2020Q3 Morocco Egypt Algeria Tunisia Source: UNCTAD. multiple regular connections to France and Italy via port. A non-representative survey conducted by the both Tunisian and foreign ferry operators.20 However, World Bank among trading companies, freight for- the dependence on Ro-Ro traffic has likely retarded warders and shipping lines suggests that imports a shift to containerized shipping, by congesting port and—to a less extent—export procedures generate space and delaying the modernization of stevedor- large unnecessary delays. These include relatively ing companies and port infrastructure. This result high customs clearance time for goods that require into Tunisia’s relative disconnect to global shipping documentary checks (orange lane) and physical routes despite its location less than 100 km from one inspections (red lane). The slow processing is partly of the world’s busiest shipping lanes (Gibraltar-Suez). due to the lack of implementation of digitization of The latest Liner Shipping Connectivity Index (3rd the procedures. While significant efforts have been quarter 2024) ranks Tunisian port system 117th in the made in the last decades to streamline trade facilita- world in terms of connectivity, which is analogous to tion processes within the port sector, these initiatives many isolated small island states in the South Pacific remain until now at an early stage across Tunisian (Figure 23). This sets Tunisia apart from the trends ports (Box 2). Consistently with the severity of these in global markets, which have increasingly relied on issues, a higher share of Tunisian firms identifies cus- container shipping for non-bulk trade given the large toms and trade regulation as a major constraint than cost advantage of this type of shipping, particularly in comparator countries (Figure 24). The delays are for long-distance trade. compounded by weak multi-modal transport, both The equipment and infrastructure con- railway and road. straints are compounded by the procedural These inefficiencies translate into a high complexities to process goods by border agen- import dwell time — a key measure of port effi- cies in ports. Bottlenecks in trade processing ciency — in Tunisian ports, raising firms’ logis- include the excessive use of physical and docu- tics costs. Rades had one of the highest average mentary checks, the cumbersome trade and for- import dwell times among the ports in Africa in 2023, eign currency requirements, inefficient procedures according to data collected by the World Bank for the before the arrival of the goods and obstacles to the removal of the goods. These bottlenecks appear to 20 These include Compagnie Tunisienne de Navigation slowdown the customs clearance process, and are (CTN), and private ferry operators (Grimaldi Lines and compounded by the weakness of multi-modal trans- Grandi Navi Veloci – GNV). 18 TUNISIA ECONOMIC MONITOR – BETTER CONNECTIVITY TO GROW FIGURE 24 • Tunisian Firms Perceive Customs and Trade Regulations as Significant Constraints Percent of firms identifying customs and trade regulations as a major constraint 35 30 25 20 15 10 5 0 MYS, 2019 THA, 2016 ALB, 2019 TUR, 2019 EGY, 2020 MAR, 2023 TUN, 2020 Source: Authors’ elaboration on World Bank Enterprise Survey data. BOX 2: ONGOING INITIATIVES TO STREAMLINE TRADE FACILITATION IN TUNISIAN PORTS The challenges faced by the reforms to trade facilitation process in Tunisia are illustrated by two key initiatives that, despite their potential, remain in the early stages of implementation. Tunisia Trade Net (TTN) Single Window: The TTN was established in 2000 as part of the World Bank-financed Export Development Program and demonstrated Tunisia’s capability to digitalize key processes. It represents a key achievement in trade facilitation for a portion of the overall set of processes required for trade. TTN centralizes and simplifies administrative procedures for international trade in Tunisia. It allows businesses to submit import and export declarations online, integrates key stakeholders—including customs, importers, exporters, banks, freight forwarders, and port authorities—and ensures real-time traceability of trade declarations. In 2006, TTN was also tasked with managing electronic document exchanges within the port community (Liasse Transport) to improve logistics chain efficiency. However, the full-scale deployment of the Liasse Transport across all ports and stakeholders has been significantly delayed. Moreover, economic operators are still required to submit paper-based documents to customs before declarations are assigned to inspectors. Additionally, most technical control agencies involved in import inspections lack operational IT systems to manage their tasks and automate exchanges with TTN-connected entities. STAM’s Terminal Operating System (TOS) and the Port Community System (PCS): With World Bank support, STAM completed the installation and partial implementation of a new TOS in 2020 at Rades port. One of the key objectives of this project was to foster better coordination among port stakeholders through a PCS. This system would combine TTN’s Liasse Transport with the TOS to create a unified digital platform that manages both administrative formalities and logistics operations. The PCS’s envisioned functionalities are vessel scheduling, container tracking, and automated data exchange between all involved parties—customs, importers, exporters, shipping lines, trucking and rail operators, terminal managers, logistics providers, and international port partners. The aim was to enable seamless global supply chain interconnections. However, the full realization of this objective has been delayed due to: (i) slow implementation of Liasse Transport across all Tunisian ports, (ii) delays in TOS deployment, as critical system modules remain non-operational due to outdated equipment and handling machinery. As a result, expected productivity gains for STAM and more efficient spatial organization within Rades port have not yet materialized. Additionally, there has been a slow adoption of new technology by operational staff. Gaps in implementation can also be traced to gaps in the structural framework for implementation, including limited public-private dialogue and need for more institutional coordination among key public entities. Future initiatives may benefit from a clear roadmap to identify and implement operational, regulatory, and technical measures aimed at simplifying procedures and enhancing port efficiency. Logistics Performance Indicator (LPI) survey (figure egies, the inefficient trade processing and the limited 25). While various factors may contribute to this high productivity of handling procedures are key drivers dwell time, such as the timing of the importer’s pay- of dwell time. Longer dwell times force firms to split ment to the supplier and the importer’s inventory strat- orders into smaller and frequent batches, translating Improving ports to support Tunisia’s development and growth 19 FIGURE 25 • Imported Containers Spend More Time in Rades than in Most other Ports in Africa (Average dwell time for imports across African countries in 2023, number of days) 35 30 25 20 15 10 5 0 CAR Mali Burkina Faso Algeria Tunisia (Rades) Uganda DRC Egypt Niger Rwanda Cameroon Nigeria Chad Burundi Zambia Tanzania Libya Botswana Zimbabwe Sudan Malawi Benin Gabon Ethiopia Côte d’Ivoire Morocco Mauritania Gambia Congo, Rep. Source: World Bank, Logistics Performance Indicator 2023. into higher logistics and inventory costs.21 Long dwell for cargo handling, the reorganization of access across times also prevent new traders from entering markets, the Canal de Bizerte, a terminal investment program for reinforcing monopolistic behaviors in supply chains.22 Sfax port; (ii) institutional constraints which affect the New World Bank estimates suggest that value chain for maritime transport, such as the review Tunisia could gain 4–5 percent of GDP from higher of the tariffs for port storage and handling to provide port shipping connectivity and reduced dwell time additional financial resources for STAM and the port within 3–4 years, with larger gains in the long authority (OMMP) and to dissuade shippers from leav- run. Our estimates—detailed in Box 3—show gains in ing cargo in port areas for extended periods of time, the order of 2.6–3.5 percent if Tunisia’s port system the expansion of the AEO scheme, the relaunch TTN achieved the same level of connectivity as countries in and update of TOS Gate system at Rades, the imple- the region similar to Tunisia in terms of population size mentation of a modern risk-based system in customs, and global integration, but with a more efficient port the rationalization of non-tariff measures; and (iii) a mix- system. That would require some decisive improve- ture of physical and institutional constraints affecting ments in infrastructure, which we estimate would be logistics nodes that converge at the ports, such as the achievable within a period of 3–4 years. At the same strengthening of the traction stocks for freight service time, our estimates suggest that addressing insti- to ports and the rehabilitation of railway lines to enable tutional bottlenecks that slow down procedures for freight traffic into and out of ports. These actions clearing goods in ports could yield gains in excess of would be complementary to a more ambitious longer 1 percent of GDP. In the longer term, should Tunisia term port development plan, which would aim to make be able to strengthen the port system to the point of Tunisia’s port sector sufficiently competitive to become becoming a trans-shipment hub, the economic gains a trans-shipment hub. could even be in the order of 11–14 percent of GDP. Various infrastructure strengthening and 21 Wilmsmeier, Gordon, Jan Hoffmann, and Ricardo policy options would improve Tunisia’s port con- Sanchez. 2006. “The Impact of Port Characteristics on nectivity and trade facilitation, enabling large eco- International Maritime Transport Costs.” In Research in Transportation Economics, Volume 16, ed. Kevin nomic gains. Such options would need to address: Cullinane and Wayne Talley. Elsevier. (i) physical constraints in the ports, such as through the 22 Raballand, G., Refas, S., Beuran, M., & Isik, G. (2012). Why development of a dedicated container terminal serving cargo dwell time matters in trade. The World Bank. Retrieved the Greater Tunis area, the equipment modernization from https://www.worldbank.org/economicpr​emise. 20 TUNISIA ECONOMIC MONITOR – BETTER CONNECTIVITY TO GROW BOX 3: ESTIMATING TUNISIA’S POTENTIAL ECONOMIC GAINS FROM IMPROVED PORT CONNECTIVITY AND DWELL TIME To have a sense of the potential impact of improving Tunisia’s connectivity, the World Bank’s analysis employed estimates by Fugazza and Hoffmann (2017), who studied the effects of changes in the Liner Shipping Connectivity Index (LSCI) on bilateral merchandise exports across a large sample of countries for the period 2006–13.a Their estimates suggest that a one standard deviation increase in the bilateral LSCI is associated on average with a 30 percent increase in bilateral exports. Using this elasticity and the latest LSCI data available (for Q4-2024), it is projected that if Tunisia achieved the level of shipping connectivity of the most connected countries in North Africa, its exports would increase by 46 and 45 percent respectively, or around TND 28 billion (US$ 9 billion). A 46 percent increase in exports would lead to approximately a 10.8–14.0 percent increase in Tunisia’s GDP, based on the estimated manufacturing or total export elasticity of GDP growth of in the long run.b Moving Tunisia to the shipping connectivity of a comparable regional peer with similar demographic characteristics, would raise its exports by 11 percent and GDP by 2.6–3.5 percent. We expect this to be a plausible order of magnitude of the gains associated with strengthening port infrastructure, including also the connectivity of ports with the rest of the country. The World Bank also used the example of Tunisian firms that obtained the authorized economic operator (AEO) status (opérateur économique agréé) to estimate the potential economic benefits of lower dwell time in ports. The introduction of the AEO status has been one of the few operational or legal developments in Tunisia aiming to reduce dwell time in recent years. Started in 2010, the AEO program has so far granted special status to 150 trusted firms. This status significantly simplifies customs procedures such as through priority status in the handling of the container, allowing advance import declaration submission and the physical inspection of the container (if needed) outside of the port. As customs procedures represent a key portion of dwell time, this simplification is likely to have reduced dwell time significantly for these operators, something that our interviews have confirmed.c The AEO status was granted to different firms at different points in time since 2010. We link this information from customs to administrative data on the universe of registered firms in Tunisia (stored by the INS in the Repertoire Nationale des Entreprises). This allows us to compare the performance of firms before and after obtaining the AEO status with the same before-after difference of similar firms which did not obtain the AEO status. The results indicate that the AEO status increased on average the firm’s employment, wage bill and revenues by 16, 12 and 15 percent respectively. Matching these estimates with the average gains in dwell time from the AEO status (2.2 days), we calculate that faster customs procedure similar to those granted to the AEO firms can potentially lead to 94,000 jobs and an addition of TD 1.2 billion in wages, or 0.8 percent of GDP. e a Fugazza, M., and Hoffmann, J. (2017). Liner shipping connectivity as determinant of trade. Journal of Shipping and trade, 2(1), 1. b The figures for total and manufacturing export elasticities are 0.24 and 0.32, respectively and are sourced from Hachicha, N. (2003). Exports, Export Composition, and Growth: A Simultaneous Error-Correction Model for Tunisia. International Economic Journal, 17(1), 101–120. c Two-thirds of the surveyed companies believe that having the AEO status facilitates foreign trade operations (shorter customs clearance times and exemption from technical controls). d Specifically, we performed a staggered difference-in-difference with synthetic control methods based on Arkhangelsky et al., 2021, which allow to limit the endogeneity concerns when constructing the control group of firms. Our final clean dataset consists of 10,365 control firms, from which we construct a specific ‘counterfactual firm’ for each of the 56 firms that received the AEO treatment. e These estimates are computed by applying the effect of AEO on employment (16 percent) and the wage bill (12 percent) to the total number of formal- waged workers (625,000) and the related wage-bill (TND 10.4 billion) of all the firms that relied on export and import activities in 2022. Improving ports to support Tunisia’s development and growth 21 1818 H Street, NW Washington, DC 20433