Tunisia Economic Outlook

Economic performance and outlook

After stagnating at 1% in 2015 and 2016, economic growth increase to an estimated 2.2% in 2017, due to the good performance in the third quarter of 2017 (1.9% year on year). GDP is projected to grow 2.8% in 2018 and 3.5% in 2019, subject to an acceleration of structural reforms,  a strong upswing in the industrial sector to meet external demand, and the easing of the cyclical nature of agricultural growth. Achieving these rates depends on the country’s ability to consolidate and sustain the growth of the real economy that began in 2017, particularly in the manufacturing and nonmanufacturing industries of phosphate, oil, and gas, as well as market services.

Macroeconomic evolution

Since 2011, Tunisia has pursued economic revitalization through public spending. This policy has made public and private consumption the main growth driver at the expense of public investment (16.1% of the 2017 budget) and given rise to significant macroeconomic imbalances by laying the foundations for a substantial dual deficit (budget and current account). The sequence of primary deficits linked to an increase in current expenditure—particularly the public service wage bill (41% of the budget in 2017)—have widened the public debt (70% of GDP at the end of 2017, up from 39.7% in 2010), which is denominated mainly in foreign currency, and led to a 104% depreciation of the dinar against the U.S. dollar over the same period. This sharp drop fueled inflation by raising the cost of imports; the Central Bank tightened monetary policy by increasing the money market rate to 5.22% in September 2017, up from 3.9% in 2012.


Several positive factors are expected to support growth in 2017 and subsequently in 2018–19. The improved security situation has revived the badly hit tourist industry. Tourism saw a 32% increase in 2017 that is likely to improve the balance of payments and help stabilize the dinar. Phosphate production and exports rebounded strongly, and investment (foreign and domestic) shows preliminary signs of picking up. Tunisia also continues to benefit from strong support from the international community. Growth is also likely to benefit from the continued recovery in the euro area, which began in 2012, particularly in France, Germany, and Spain, and is expected to drive up exports. Finally, Tunisia may benefit from the dividends of strategic reforms adopted since 2015. These include the Law of November 27, 2015, on public-private partnerships and that of September 30, 2016, on investment to boost the investment rate in accordance with the Strategic Development Plan 2016–2020, which anticipates an increase from 19% of GDP in 2016 to 24% in 2020.


Since 2011, public accounts have continued to deteriorate. Dominated by current expenditure (72% of the budget in 2017), public spending does not reflect the need for capital expenditure, particularly in infrastructure, which is required to maintain long-term competitiveness. Despite some advances, the progress of structural reforms remains limited because of resistance to changes to the development model that has supported the economy since the 1970s. However, acceleration of these reforms remains essential to the country’s ability to benefit from the support of development partners and the confidence of the markets in its ability to (re)finance debt. Other negative medium-term factors are a deterioration of the security situation due to the crisis in Libya and a possible resurgence of social conflicts related to public sector reform and the decline in purchasing power.