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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