North Africa

Tunisia Economic Outlook

  • The new government that took office in February 2015 has continued the economic recovery plan launched in 2011, with a striking 21.6% increase in investment in 2015.
  • he worsening security situation after the terrorist attacks in Sousse and Tunis and rising social unrest affected growth, which is not expected to exceed 0.5% in 2015, as the country entered a recession in the second quarter of the year.
  • The start of decentralisation in 2015 and municipal elections in 2016 should boost local democracy, a key to successful and sustainable urban policy that involves citizens.

Growth for the year was anticipated as 3% in the 2015 budget but it was no more than 0.5% in the end (down from 2.3% in 2014), due to the contraction of non-manufacturing industries in the first quarter, notably oil production and an almost complete halt in phosphate mining in the centre of the country because of strikes. This was partly offset by growth in agriculture, non-commercial services and manufacturing. Tourism (7% of gross domestic product), the traditional source of foreign currency and jobs (400 000 direct and indirect), took a sharp dive, with revenue 35% down on 2014.

Domestic consumption is expected to continue as the chief engine of the economy in 2016 and 2017. Investment was 18.5% of GDP in 2015 (down from 21.9% in 2014) despite a slight recovery of foreign direct investment (FDI) in the second quarter after the elections went well. Government capital investment increased 21.6%.

The weak 2015 performance, along with macroeconomic imbalances, prevent the country from dealing with its main problems, such as unemployment, which remains high (15% in 2015) despite much more hiring in the public sector since 2011. Joblessness is greater among women (21.1%) than men (12.5%) and especially hits college graduates (31.4%).

Regional disparities persist because of meagre government investment and inefficient local authorities. The country is administratively centralised and economically polarised, with activity concentrated in the expanding towns and cities of the coastal regions, so the gap between these and smaller urban areas in the interior is widening. To a lesser extent, overall disparity is growing between urban and rural areas, notably in three of the country’s six regions (Nord-Ouest, Centre-Ouest and Sud).

The last census (2014) showed that facilities, roads, health care and leisure services in the governorates of Kasserine, Sidi Bouzid, Gafsa, Jendouba, Kebili and Kairouan were lagging behind the national average and also behind the average in coastal governorates and even regions of the interior.