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Economy of Tunisia

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Economy of Tunisia
Amen Bank, one of the biggest banks in the country
CurrencyTunisian dinar (TND, د.ت)
calendar year
Trade organisations
African Union, AfCFTA (signed), WTO, COMESA, CEN-SAD, AMU
Country group
Statistics
PopulationIncrease 12,352,187 (2023)[3]
GDP
  • Increase $53.482 billion (nominal est, 2024)[4]
  • Increase $178.928 billion (PPP, 2024)[4]
GDP rank
GDP growth
  • 4.2% (2021f)[5]
GDP per capita
  • Increase $4,136 (nominal, est, 2024)[4]
  • Increase $14,294 (PPP, 2024)[4]
GDP per capita rank
GDP by sector
Negative increase 6.53% (2022 est.)[4][7]
Population below poverty line
  • 15.2% (2015)[8]
  • 17.5% on less than $5.50/day (2015)[9]
32.8 medium (2015)[10]
Labour force
  • Increase 4,080,000 (Q2, 2022)[13]
  • Increase 46% employment rate (Q2, 2022)[14]
Labour force by occupation
UnemploymentPositive decrease 15.3% (Q2, 2022)
$360 monthly (2023)[15]
Main industries
petroleum, mining (particularly phosphate, iron ore), tourism, textile, footwear, agriculture, beverages, olive oil
External
ExportsIncrease $19.06 billion USD (2019)[16]
Export goods
clothing, semi-finished goods and textiles, agricultural products, mechanical goods, phosphates and chemicals, hydrocarbons, electrical equipment
Main export partners
ImportsNegative increase $21.57 billion USD (2019)[18]
Import goods
textiles, machinery and equipment, hydrocarbons, chemicals, foodstuffs
Main import partners
FDI stock
  • Increase $37.95 billion (31 December 2017 est.)[6]
  • Steady Abroad: $285 million (31 December 2017 est.)[6]
Increase −$2.690 billion (2019)
Negative increase $30.19 billion (31 December 2017 est.)[6]
Public finances
Negative increase 70.3% of GDP (2017 est.)[6]
−5.8% (of GDP) (2017 est.)[6]
Revenues10.957 billion (2022 est.)[6]
Expenses12.523 billion (2022 est.)[6]
Increase $8.5 billion (23 December 2023 est.)[6]
All values, unless otherwise stated, are in US dollars.

The economy of Tunisia is in the process of being liberalized after decades of heavy state direction and participation in the country's economy. Prudent economic and fiscal planning has resulted in moderate but sustained growth for over a decade. Tunisia's economic growth historically has depended on oil, phosphates, agri-food products, car parts manufacturing, and tourism. In the World Economic Forum Global Competitiveness Report for 2015–2016, Tunisia ranks in 92nd place.[21]

The year 2015 was marked by terrorist attacks in Tunisia which are likely to affect economic growth, especially in tourism, one of the main sectors.[22]

Historical trend

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GDP per capita soared by more than 380% in the seventies (1970–1980: USD 280–1,369). But this proved unsustainable and it collapsed to a cumulative 10% growth in the turbulent eighties (1980–1990: USD 1,369–1,507), rising again to almost 50% cumulative growth in the nineties (1990–2000: USD 1,507–2,245), signifying the impact of successful diversification.[23]

Olive grove in Sfax, Tunisia

Growing foreign debt and the foreign exchange crisis in the mid-1980s led the government to launch a structural adjustment program to liberalize prices, reduce tariffs, and reorient Tunisia toward a market economy in 1986. Tunisia's economic reform program was lauded as a model by international financial institutions. The government liberalized prices, reduced tariffs, lowered debt-service-to-exports and debt-to-GDP ratios, and extended the average maturity of its $10 billion foreign debt. Structural adjustment brought additional lending from the World Bank and other Western creditors. In 1990, Tunisia acceded to the General Agreement on Tariffs and Trade (GATT) and is a member of the World Trade Organization (WTO).

In 1996 Tunisia entered into an "Association Agreement" with the European Union (EU) which removed tariffs and other trade barriers on most goods by 2008. In conjunction with the Association Agreement, the EU is assisting the Tunisian government's Mise A Niveau (upgrading) program to enhance the productivity of Tunisian businesses and prepare for competition in the global marketplace.

The government totally or partially privatized around 160 state-owned enterprises after the privatization program was launched in 1987. Although the program is supported by the GATT, the government had to move carefully to avoid mass firings. Unemployment continued to plague Tunisia's economy and was aggravated by a rapidly growing workforce. An estimated 55% of the population is under the age of 25. Officially, 15.2% of the Tunisian workforce is unemployed.

In 2011, after the Arab Spring, the economy slumped but then recovered with 2.81% GDP growth in 2014. However, unemployment is still one of the major issues with 15.2% of the labor force unemployed as of the first quarter of 2014. Tunisia's political transition gained new momentum in early 2014, with the resolution of a political deadlock, the adoption of a new Constitution and the appointment of a new government. The national dialogue platform, brokered by key civil society organizations, played a crucial role in gathering all major political parties. This consensus will allow for further reform in the economy and public sector.

In 2015, the Bardo National Museum attack led to the collapse of the third largest sector of Tunisia's economy;[24] tourism. Tunisian tourist workers in Tunis have said that "tourism is dead, it is completely dead", expressing the severe drop in tourism after the attack.[25]

The number of ragpickers in Tunisia is increasing due to the continuing high level of unemployment, the loss of purchasing power of the most disadvantaged families, and the explosion of plastic waste due to new consumption habits. Ragpickers do not benefit from social protection, granted to professions with a legal status and may be subject to the exploitation of the Recycling industry.[26]

The following table shows the main economic indicators in 1980–2017. Inflation under 5% is in green.[27]

Year GDP
(in Bil. US$ PPP) 		GDP per capita
(in US$ PPP) 		GDP

(in bil. US$ nominal)

GDP growth
(real) 		Inflation rate
(in Percent) 		Unemployment
(in Percent) 		Government debt
(in % of GDP)
1980 13.6 2,127 9.6 Increase7.4% Negative increase10.1% n/a n/a
1981 Increase15.8 Increase2,387 Decrease9.2 Increase5.5% Negative increase8.9% n/a n/a
1982 Increase16.6 Increase2,463 Decrease8.9 Decrease−0.5% Negative increase13.7% n/a n/a
1983 Increase18.0 Increase2,618 Increase9.2 Increase4.7% Negative increase9.0% n/a n/a
1984 Increase19.7 Increase2,833 Decrease9.1 Increase5.7% Negative increase8.6% n/a n/a
1985 Increase21.5 Increase2,991 Increase9.2 Increase5.7% Negative increase7.6% n/a n/a
1986 Increase21.6 Decrease2,894 Increase9.9 Decrease−1.5% Negative increase6.2% n/a n/a
1987 Increase23.7 Increase3,101 Increase10.7 Increase6.7% Negative increase8.2% n/a n/a
1988 Increase24.5 Increase3,158 Increase11.1 Increase0.1% Negative increase7.2% n/a n/a
1989 Increase26.1 Increase3,306 Increase11.1 Increase2.6% Negative increase7.7% n/a n/a
1990 Increase29.0 Increase3,560 Increase14.1 Increase7.1% Negative increase6.5% 16.2% n/a
1991 Increase31.2 Increase3,756 Increase14.9 Increase4.1% Negative increase7.7% Steady16.2% 66.4%
1992 Increase34.5 Increase4,065 Increase17.8 Increase8.0% Negative increase5.5% Steady16.2% Positive decrease65.2%
1993 Increase36.2 Increase4,224 Decrease16.7 Increase2.5% Increase4.0% Negative increase16.3% Negative increase66.9%
1994 Increase38.3 Increase4,362 Increase17.9 Increase3.6% Negative increase5.4% Steady16.3% Negative increase67.0%
1995 Increase40.2 Increase4,484 Increase20.6 Increase2.7% Negative increase6.2% Positive decrease16.2% Negative increase68.8%
1996 Increase43.7 Increase4,808 Increase22.3 Increase6.9% Increase3.7% Positive decrease16.1% Negative increase70.1%
1997 Increase47.0 Increase5,100 Decrease21.8 Increase5.7% Increase3.6% Positive decrease15.9% Positive decrease69.9%
1998 Increase49.9 Increase5,342 Increase22.9 Increase5.0% Increase3.1% Negative increase16.1% Positive decrease61.0%
1999 Increase53.7 Increase5,676 Increase24.1 Increase6.0% Increase2.8% Positive decrease16.0% Negative increase65.0%
2000 Increase57.3 Increase5,993 22.5 Increase4.3% Increase2.8% Positive decrease15.7% Negative increase65.9%
2001 Increase61.4 Increase6,362 Increase23.1 Increase4.9% Increase1.9% Positive decrease15.1% Positive decrease54.7%
2002 Increase63.4 Increase6,503 Increase24.3 Increase1.7% Increase1.9% Negative increase15.3% Positive decrease54.2%
2003 Increase68.2 Increase6,931 Increase28.8 Increase5.5% Increase2.1% Positive decrease14.5% Negative increase55.1%
2004 Increase74.3 Increase7,476 Increase32.7 Increase6.0% Increase2.5% Positive decrease14.2% Positive decrease54.1%
2005 Increase79.7 Increase7,947 Increase33.9 Increase4.0% Increase2.4% Positive decrease12.8% Positive decrease52.4%
2006 Increase86.8 Increase8,570 Increase36.1 Increase5.7% Increase3.2% Positive decrease12.5% Positive decrease47.8%
2007 Increase94.7 Increase9,260 Increase40.8 Increase6.3% Increase3.0% Positive decrease12.4% Positive decrease44.8%
2008 Increase100.8 Increase9,763 Increase47.0 Increase4.5% Increase4.3% Steady12.4% Positive decrease42.0%
2009 Increase104.8 Increase10,036 Decrease45.6 Increase3.1% Increase3.7% Negative increase13.3% Positive decrease40.5%
2010 Increase108.8 Increase10,315 Increase46.2 Increase2.6% Increase3.3% Positive decrease13.0% Positive decrease39.2%
2011 Increase108.9 Decrease10,204 Increase48.1 Decrease−1.9% Increase3.5% Negative increase18.9% Negative increase43.1%
2012 Increase115.2 Increase10,694 Decrease47.3 Increase3.9% Negative increase5.1% Positive decrease16.7% Negative increase47.7%
2013 Increase120.0 Increase11,020 Increase48.7 Increase2.4% Negative increase5.8% Positive decrease15.3% Positive decrease46.8%
2014 Increase124.9 Increase11,355 Increase50.3 Increase2.3% Increase4.9% Steady15.3% Negative increase51.6%
2015 Increase127.6 Increase11,487 Decrease45.8 Increase1.1% Increase4.9% Negative increase15.4% Negative increase54.8%
2016 Increase130.5 Increase11,448 Decrease44.4 Increase1.0% Increase3.7% Negative increase15.5% Negative increase61.2%
2017 Increase135.4 Increase11,755 Decrease42.2 Increase1.9% Negative increase5.3% Positive decrease15.3% Negative increase71.3%

External trade and investment

[edit]
Tunisian exports in 2006

In 1992, Tunisia re-entered the private international capital market for the first time in 6 years, securing a $10-million line of credit for balance-of-payments support. In January 2003 Standard & Poor's affirmed its investment grade credit ratings for Tunisia. The World Economic Forum 2002-03 ranked Tunisia 34th in the Global Competitiveness Index Ratings (two places behind South Africa, the continent's leader). In April 2002, Tunisia's first US dollar-denominated sovereign bond issue since 1997 raised $458 million, with maturity in 2012.

The Bourse de Tunis is under the control of the state-run Financial Market Council and lists over 50 companies. The government offers substantial tax incentives to encourage companies to join the exchange, and expansion is occurring.

The Tunisian government adopted a unified investment code in 1993 to attract foreign capital. More than 1,600 export-oriented joint venture firms operate in Tunisia to take advantage of relatively low labor costs and preferential access to nearby European markets. Economic links are closest with European countries, which dominate Tunisia's trade. Tunisia's currency, the dinar, is not traded outside Tunisia. However, partial convertibility exists for bona fide commercial and investment transaction. Certain restrictions still limit operations carried out by Tunisian residents.

The stock market capitalisation of listed companies in Tunisia was valued at $5.3 Billion in 2007, 15% of 2007 GDP, by the World Bank.[28]

For 2007, foreign direct investment totaled TN Dinar 2 billion in 2007, or 5.18% of the total volume of investment in the country. This figure is up 35.7% from 2006 and includes 271 new foreign enterprises and the expansion of 222 others already based in the country.

The economic growth rate seen for 2007, at 6.3% is the highest achieved in a decade.

On 29 and 30 November, Tunisia held an investment conference with country chiefs from all around the world with pledges that have reached $30 billion to finance new public projects.[29]

As of 2022, Tunisia's government is in need of international help as the economy grapples with a crisis in public finances that has raised fears it may default on debt and has contributed to shortages of food and fuel, according to government critics. As a result, the government announced in December 2022 that they expect to reduce its fiscal deficit to 5.5% in 2023 from a forecast 7.7% this year, driven by austerity measures that could pave the way for a final deal with the International Monetary Fund on a rescue package.[30]

Loan guarantee

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Source:[31]

On 20 April 2012, U.S. Treasury Secretary[32] and Tunisian Finance Minister Houcine Dimassi signed a declaration of intent[33] to move forward on a U.S. loan guarantee for Tunisia. The U.S. Government would provide this loan guarantee to enable the Tunisian government to access significant market financing at affordable rates and favorable maturities with the backing of a U.S. guarantee of principal and interest (up to 100 percent).

The support would consist of the U.S. guarantee of Tunisian government-issued debt (or of bank loans made to the Government of Tunisia). This guarantee will significantly reduce the Tunisian government's borrowing costs at a time when market access has become more expensive for many emerging market countries. In the weeks ahead, both governments intend to make progress on a loan guarantee agreement that would allow Tunisia to move forward with a debt issuance.

The ceremony took place at the World Bank immediately following the meeting of Finance Ministers of the Deauville Partnership with Arab Countries in Transition.

Microfinance institutions, such as Enda Tamweel, exist to assist those who are unable to access the regular banking system. This comprises those living in rural or impoverished regions where the informal sector thrives, accounting for 34% of Tunisia's GDP.[34][35]

Enda Tamweel has made over 3 million microloans to over 900,000 people in the 30 years since its inception, infusing more than €1.6 billion into the local economy.[34][35]

Energy

[edit]
Main article: Energy in Tunisia

Tunisia's natural resources are modest when compared to those of its neighbors: Algeria and Libya. This modesty in natural resources forced the country to import oil, which contributed to the rise in the cost of gasoline: on 26 April 2006, the liter crossed the bar of one dinar to sell for 1.50 Tunisian dinars. (a price equivalent to European prices from the point of view of purchasing power parity).[36]

Electricity

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  • Production: 16.13 Billion kWh (2011)[37]
  • Production by source:
    • fossil fuel: 96.8% (2010)
    • hydro: 1.7% (2010)
    • other: 1.5% (2010)
  • Consumption: 13.29 billion kWh (2010)
  • Exports: None (2010)
  • Imports: 19 million kWh (2010)

Economic structure

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In 2017, the breakdown by economic sector is as follows:

Economy sector contribution to GDP
Agriculture 10,1 %
Industry 26,2 %
Services 63,8 %

Agriculture

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Agriculture - products: olives, grain, tomatoes, citrus fruit, sugar beets, dates, almonds.

In 2018, Tunisia produced:

  • 1.5 million tons of wheat;
  • 1.3 million tons of tomato (16th largest producer in the world);
  • 825 thousand tons of olives (7th largest producer in the world);
  • 700 thousand tons of barley;
  • 548 thousand tons of watermelon;
  • 450 thousand tons of onion;
  • 426 thousand tons of pepper;
  • 423 thousand tons of potato;
  • 241 thousand tons of date (10th largest producer in the world);
  • 217 thousand tons of carrots;
  • 146 thousand tons of grape;
  • 144 thousand tons of orange;
  • 118 thousand tons of peach;
  • 114 thousand tons of apple;
  • 104 thousand tons of grapefruit;
  • 102 thousand tons of melon.

In addition to smaller productions of other agricultural products, like almond (66 thousand tons) and sugar beet (76 thousand tons).[38]

See also

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References

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  1. ^ "World Economic Outlook Database, April 2019". IMF.org. International Monetary Fund. Retrieved 29 September 2019.
  2. ^ "World Bank Country and Lending Groups". datahelpdesk.worldbank.org. World Bank. Retrieved 29 September 2019.
  3. ^ locations=TN&name_desc=false "Population, total - Tunisia". data.worldbank.org. World Bank. Retrieved 3 October 2019. {{cite web}}: Check |url= value (help)
  4. ^ a b c d e "World Economic Outlook Database, October 2019". IMF.org. Retrieved 16 November 2019.
  5. ^ Rabah, Arezki; Daniel, Lederman; Amani, Abou Harb; Nelly, El-Mallakh; Yuting, Fan; Asif, Islam; Ha, Nguyen; Marwane, Zouaidi (9 April 2020). Middle East and North Africa Economic Update, April 2020 : How Transparency Can Help the Middle East and North Africa. World Bank. p. 10. ISBN 9781464815614. Retrieved 10 April 2020. {{cite book}}: |website= ignored (help)
  6. ^ a b c d e f g h i j "The World Factbook". CIA.gov. Central Intelligence Agency. Retrieved 12 May 2019.
  7. ^ "Tunisia - inflation rate 1986-2022".
  8. ^ "Poverty headcount ratio at national poverty lines (% of population) - Tunisia". data.worldbank.org. World Bank. Retrieved 20 March 2020.
  9. ^ "Poverty headcount ratio at $5.50 a day (2011 PPP) (% of population) - Tunisia". data.worldbank.org. World Bank. Retrieved 20 March 2020.
  10. ^ "GINI index (World Bank estimate)". data.worldbank.org. World Bank. Retrieved 12 May 2019.
  11. ^ "Human Development Index (HDI)" (PDF). hdr.undp.org. HDRO (Human Development Report Office) United Nations Development Programme. Retrieved 22 November 2022.
  12. ^ "Inequality-adjusted Human Development Index (IHDI)". hdr.undp.org. HDRO (Human Development Report Office) United Nations Development Programme. Retrieved 22 November 2022.
  13. ^ "Labor force, total - Tunisia". data.worldbank.org. World Bank. Retrieved 27 November 2019.
  14. ^ "Employment to population ratio, 15+, total (%) (national estimate) - Tunisia". data.worldbank.org. World Bank. {{cite web}}: Missing or empty |url= (help)
  15. ^ "Rankings by Country of Average Monthly Net Salary (After Tax) (Salaries And Financing)". www.numbeo.com.
  16. ^ "Tunisia Exports 1965-2022".
  17. ^ a b "Foreign trade partners of Tunisia". The Observatory of Economic Complexity. Retrieved 18 June 2021.
  18. ^ "Tunisia Trade | WITS | Text".
  19. ^ "Sovereigns rating list". Standard & Poor's. Retrieved 26 May 2011.
  20. ^ a b c Rogers, Simon; Sedghi, Ami (15 April 2011). "How Fitch, Moody's and S&P rate each country's credit rating". The Guardian. Retrieved 28 May 2011.
  21. ^ "Competitiveness Rankings".
  22. ^ Solutions, EIU Digital. "Tunisia Economy, Politics and GDP Growth Summary - The Economist Intelligence Unit". country.eiu.com.
  23. ^ "Tunisia: GDP per capita". Index Mundi. Retrieved 2 July 2012.
  24. ^ "CIA World Factbook". cia.gov. CIA. Retrieved 16 July 2015.
  25. ^ "Tunisia's tourism grappling with job losses". BBC World. 15 July 2015. Retrieved 16 July 2015.
  26. ^ "A Tunis, les chiffonniers sortent de l'ombre". Le Monde. 28 May 2019. Retrieved 11 April 2022.
  27. ^ "Report for Selected Countries and Subjects". www.imf.org. Retrieved 7 October 2018.
  28. ^ "Data - Finance". Archived from the original on 5 December 2006. Retrieved 2009-12-31.
  29. ^ "Hoping to preserve democracy, Tunisia woos foreign investors". Archived from the original on 30 November 2016.
  30. ^ Amara, Tarek (23 December 2022). "Tunisia seeks to cut fiscal deficit to 5.5% in 2023, led by economic reforms". Reuters. Retrieved 28 December 2022.
  31. ^ "Treasury Secretary Geithner and Tunisian Finance Minister Dimassi Sign Declaration to Work Toward U.S. Loan Guarantee for Tunisia". U.S. Department of the Treasury. Retrieved 13 June 2012.
  32. ^ Timothy Geithner
  33. ^ "FAQs: U.S. LOAN GUARANTEE FOR TUNISIA" (PDF). U.S. Department of the Treasury. Archived (PDF) from the original on 27 July 2014. Retrieved 13 September 2012.
  34. ^ a b "A helping hand for young entrepreneurs in Tunisia". European Investment Bank. Retrieved 15 July 2021.
  35. ^ a b "EBRD, Enda Tamweel and Attijari Bank supporting microfinance in Tunisia". www.ebrd.com. Retrieved 15 July 2021.
  36. ^ "Tunisia Energy Situation - energypedia". energypedia.info. Retrieved 14 October 2021.
  37. ^ "Nation Master".
  38. ^ Tunisia production in 2018, by FAO
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