Publication: Tunisia Economic Monitor, Spring 2025: Better Connectivity to Grow
Loading...
Other Files
65 downloads
13 downloads
17 downloads
Published
2025-06-04
ISSN
Date
2025-06-04
Author(s)
Editor(s)
Abstract
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.
Link to Data Set
Citation
“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.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Related items
Showing items related by metadata.
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. Such cooperation should include focusing international assistance towards development objectives in Tunisia. Based on available evidence, increasing household incomes will contribute to reducing the propensity to consider emigrating through irregular channels. As its importance as a destination country (hence migrants who want to settle in Tunisia) is likely to increase, Tunisia can also enhance the economic benefits from immigrants by facilitating migrants’ regular status and streamlining the recognition of their qualifications, which has been identified as one of the key aspects for the successful implementation of bilateral mobility agreements involving skill partnerships.Publication Tunisia Economic Monitor, Fall 2024: Equity and Efficiency of Tunisia Tax System(Washington, DC: World Bank, 2024-11-14)The Tunisian economy experienced a modest growth of 0.6 percent in the first half of 2024, following zero growth in 2023. 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.
Users also downloaded
Showing related downloaded files
Publication FY 2024 Tunisia Country Opinion Survey Report(Washington, DC: World Bank, 2025-02-24)The Country Opinion Survey in Tunisia assists the World Bank Group (WBG) in better understanding how Tunisia stakeholders perceive the WBG. It provides the WBG with systematic feedback from national and local governments, multilateral/bilateral agencies, media, academia, the private sector, and civil society in Tunisia on 1) their views regarding the general environment in Tunisia; 2) their overall attitudes toward the WBG in Tunisia; 3) overall impressions of the WBG’s effectiveness and results, knowledge work and activities, and communication and information sharing in Tunisia; and 4) their perceptions of the WBG’s future role in Tunisia.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. Such cooperation should include focusing international assistance towards development objectives in Tunisia. Based on available evidence, increasing household incomes will contribute to reducing the propensity to consider emigrating through irregular channels. As its importance as a destination country (hence migrants who want to settle in Tunisia) is likely to increase, Tunisia can also enhance the economic benefits from immigrants by facilitating migrants’ regular status and streamlining the recognition of their qualifications, which has been identified as one of the key aspects for the successful implementation of bilateral mobility agreements involving skill partnerships.Publication Tunisia Economic Monitor, Summer 2020(World Bank, Washington, DC, 2020-06)The Tunisia Economic Monitor provides an update on key economic developments and policies. It examines these economic developments and policies in a longer-term and global context and assesses their implications for the outlook for the country. There are two special focus sections in this edition of the Tunisia Economic Monitor. The first discusses the macroeconomic impact of the COVID-19 (coronavirus) pandemic on the Tunisian economy and the second presents findings from a diagnostic of Tunisia’s infrastructure sectors (transport, electricity, water and sanitation, and information and communication technology) carried out by the World Bank in collaboration with the Government of Tunisia.Publication All in the Family(Elsevier, 2017-01)We examine the relationship between entry regulation and the business interests of former President Ben Ali’s family using firm-level data from Tunisia. Connected firms account for a disproportionate share of aggregate employment, output and profits, especially in sectors subject to authorization and restrictions on FDI. Quantile regressions show that profit and market share premia from being connected increase along the firm-size distribution, especially in highly regulated sectors. These patterns are partly explained by Ben Ali’s relatives sorting into the most profitable sectors. The market shares of connected firms are positively correlated with exit and concentration rates in highly regulated sectors. Although causality is difficult to establish, the results are consistent with the hypothesis that the Ben Ali clan abused entry regulation for private gain at the expense of reduced competition.Publication Tunisia(World Bank, Washington, DC, 2015-06)The Tunisia Systematic Country Diagnostic (SCD) seeks to identify the challenges and opportunities to achieve the twin goals of reducing poverty and boosting shared prosperity in a sustainable way. This SCD takes into account Tunisia’s historical sociopolitical context and the political economy of past reforms to provide the context for the challenges and opportunities that exist today to make progress toward the twin goals. The economic policies of the two decades preceding the 2011 revolution delivered widely recognized achievements, including growth rates above the regional average, impressive progress in human development indicators and reduced poverty. However, they failed to address, and even exacerbated, the deep-rooted distortions in the economy that closed the channels, in particular, productive employment and job creation, for a more equal and inclusive society. These distortions were also grounded in a tightly controlled social and political space that favored the elite while repressing others. This development model proved to be economically and socially unsustainable. With a new constitution adopted in 2014 and a democratically-elected government established in 2015, there is today an unprecedented window of opportunity for Tunisia to embark on deep structural reforms to open the channels conducive to a more equal and inclusive society and put the country on a path of more sustainable development. The SCD identifies key opportunities to build on Tunisia’s multiple strengths and economic potential to help guide future development policies. It highlights the importance of social and political stability (as well as domestic security) as prerequisites for critical reforms to be undertaken, as well as the importance of voice, transparency, and accountability in all economic and institutional spheres for those reforms to be sustainable.