Publication: Tunisia Economic Monitor, Spring 2025: Better Connectivity to Grow
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2025-06-04
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2025-06-04
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The Tunisian economy grew by 1.4 percent in 2024 after the zero growth in 2023 and it is diverging from its neighbors in North Africa, with a gross domestic product (GDP) below its pre-Covid level in 2024. The economy continues to operate in a challenging policy and financing environment, including regulatory barriers to investment, which is not conducive to robust and sustained growth. The limited recovery of agriculture - with rising rainfall levels but still below historical averages - along with the moderate performance of oil and gas, manufacturing and construction sectors dragged the growth of the economy in 2024. This modest recovery continued to weigh on the labor market. The unemployment rate in 2024 was almost a percentage point above its pre-Covid, and the labor force participation rate hovered 1.2 percentage point below the pre-Covid rate. Expanding affordable and quality childcare services and strengthening parental leaves can raise labor force participation, particularly for women in Tunisia, with potentially significant impacts on economic growth. The current account deficit continued to moderate, easing some of the pressure on external financing. The trade deficit widened by 10.9 percent in 2024, remaining stable as a share of GDP at 11.4 percent. The deficit deteriorated further in the first quarter of 2025, as it increased by two thirds compared to the same period in 2024, driven by a 5.9 percent decline in exports. The surge in agricultural exports compensated for the deterioration of the trade balance of garments and mechanic industries in 2024. The energy deficit widened further on the back of rising import prices, continuing to account for the bulk of the merchandise trade deficit. The stability of the trade deficit and the increase in the services surplus reduced the current account deficit (CAD) to 1.7 percent of GDP in 2024, compared with 2.3 per cent of GDP in 2023 and 8.8 per cent in 2022. While the lower CAD eases the pressure on external financing needs, the latter remains significant especially due to the burdensome debt service.
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“World Bank. 2025. Tunisia Economic Monitor, Spring 2025: Better Connectivity to Grow. © World Bank. http://hdl.handle.net/10986/43293 License: CC BY-NC 3.0 IGO.”
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Publication Tunisia Economic Monitor, Spring 2024(Washington, DC: World Bank, 2024-05-09)Tunisia’s already modest economic recovery almosthalted in 2023, amidst a severe drought, tight financingconditions and the modest pace of implementingreforms. With this slowdown, the Tunisian economy in2023 was still below its pre-Covid level, marking oneof the slowest recoveries in the Middle East and NorthAfrican region. Agriculture was the main driver of the2023 economic slowdown, declining by 11 percent asthe drought forced the government to introduce irrigationrestrictions. This highlights the urgency for Tunisiato adapt to climate change. The weak domesticdemand and the fiscal consolidation appear to haveadded to the drought-related losses, with the declinesin construction and commerce sectors offsetting someof the gains from export markets, particularly tourism.The growth slowdown–especially in labor-intensivesectors–translated into higher unemployment andlower labor force participation.Publication Tunisia Economic Monitor, Fall 2023: Migration Amid a Challenging Economic Context(Washington, DC: World Bank, 2023-12-04)Migration will likely become increasingly important for Tunisia in terms of both inflows and outflows, given the demographic transition in both Tunisia and Europe. As such Tunisia can work (also with partner countries) to maximize the benefits of migration. As a country of mainly emigration, Tunisia could help strengthen the match of its emigrants with the demand abroad, including through enhanced cooperation with destination countries. 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By the end of 2024, Tunisia is projected to be the only country in its region with a real GDP still below pre-pandemic levels. The limited recovery in agriculture, coupled with declines in the oil and gas, garments, and construction sectors, hindered economic growth. Below-average rainfall restricted agricultural growth, which only recovered a third of the significant losses from the first half of 2023. The garment sector suffered due to reduced demand from the European Union, Tunisia's main export market. Oil and gas production continued its decade-long decline due to a lack of new investments, and the construction sector was impacted by limited domestic demand and challenging external financing conditions.Publication Tunisia Economic Monitor, Winter 2021(World Bank, Washington, DC, 2022-01-20)The Economic Monitor examines four possible factors behind Tunisia’s slow recovery. First, the drop in mobility related to the pandemic may have been more harmful in Tunisia. However, mobility in Tunisia has dropped to a similar extent as other countries and it has now returned to pre-pandemic levels following the acceleration in the vaccination campaign since July. If anything, the mobility drop in Tunisia has resulted in a lower reduction in economic activity than in comparator countries as Algeria and Egypt. Second, it could be that the level of public support to the ailing firms and households may have been particularly low. However, at 2.3 percent of GDP, the Covid-19 stimulus package in 2020 was in the same ballpark as other comparators in the region. Third, the structure of the Tunisian economy, particularly its reliance on tourism, may have exposed it to the negative demand shock more than other countries. Indeed hotels, cafe and restaurant and transport are the sectors which have contracted the most since the start of the pandemic. The losses of these sectors explain a significant portion of the negative effects of the crisis in Tunisia, although they do not fully account for such slow recovery.Publication Algeria Economic Monitor, Spring 2021(World Bank, Washington, DC, 2021-03-31)This Algeria Economic Monitor provides an update on key recent economic developments and policies. It places them in a longer-term and global context and assesses the implications these developments and changes in policies have on the outlook for Algeria. This Monitor’s coverageranges from the macro-economy to financial markets to indicators of human welfare and development. It is intended for a wide audience, including policy makers, business leaders, financial market participants, and the community of analysts and professionals engaged in Algeria. The report is divided into four chapters. Chapter 1 presents the country’s macroeconomic developments in 2020 and early 2021. Chapter 2 presents the short- to medium-term outlook for the Algerian economy. Chapter 3 details the impact of the COVID-19 pandemic on inequality in Algeria based on evidence across the Middle East and North African (MENA) region. Finally, Chapter 4 looks at the key challenges in the country’s health sector as the COVID-19 pandemic eases. The cut-off date for data and forecasting is June 11, 2021.
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