* Describe Tunisia and the economic opportunities there
* Describe Tunisia and the economic opportunities there
Growth picked up to 2.5 percent year-on-year (y-o-y) in 2018 from 2 percent in 2017, supported by agriculture, services (including tourism which witnessed a significant rebound), and electrical and mechanical industries. On the demand side, growth in 2018 was driven by a resurgence of exports and investment, while private consumption contracted. Following a significant acceleration of inflation since 2017, and four Central Bank (BCT) policy rate increases which raised rates from 4.25 percent to 6.75 percent, inflation began to decelerate as of the second half of 2018, but remains above 7 percent. In February 2019, BCT further increased the policy rate by 100 basis points following agreement between the government and the main union federation (UGTT) to increase public sector salaries.
Growth is projected to pick up to an average of 3 percent in 2019-20 and to reach its potential of about 4 percent over the medium term, contingent on the completion of pressing reforms to improve investment climate and ensure greater security and social stability. Growth will be supported by expansions in agriculture, manufacturing, and tourism, and the coming online of the Nawara gas field as of mid-2019. Poverty is projected to hover around 3 percent using the 3.2 U$ PPP per day line and below 1 percent using the extreme poverty line.
* What does Tunisia have?
Tunisia is the 72nd largest export economy in the world and the 69th most complex economy according to the Economic Complexity Index (ECI). In 2017, Tunisia exported $16.1B and imported $20.8B, resulting in a negative trade balance of $4.7B. In 2017 the GDP of Tunisia was $40B and its GDP per capita was $11.9k.
The top exports of Tunisia are Insulated Wire ($2.08B), Non-Knit Men's Suits ($866M), Non-Knit Women's Suits ($543M), Crude Petroleum ($490M) and Vehicle Parts ($457M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Refined Petroleum ($1.53B), Petroleum Gas($882M), Cars ($681M), Low-voltage Protection Equipment ($488M) and Insulated Wire ($482M).
The top export destinations of Tunisia are France($5.02B), Italy ($2.6B), Germany ($2.03B), Spain($538M) and the United States ($438M). The top import origins are France ($3.38B), Italy ($3.33B), China ($1.85B), Germany ($1.79B) and Turkey($1.05B).
* What is the typical wage/price level?
Salaries in Tunisia range between 722 TND per month (minimum salary) to 23,632 TND per month (maximum salary).
The median salary is 5,283 TND per month, which means that half (50%) of the population are earning less than 5,283 TND while the other half are earning more than 5,283 TND. The median represents the middle salary value. Generally speaking, you would want to be on the right side of the graph with the group earning more than the median salary.
Closely related to the median are two values: the 25th and the 75th percentiles. Reading from the salary distribution diagram, 25% of the population are earning less than 2,702 TND while 75% of them are earning more than 2,702 TND. Also from the diagram, 75% of the population are earning less than 14,168 TND while 25% are earning more than 14,168 TND.
* What is the political/economic culture like?
Tunisia remains a country of contrasts: while important progress has been made on political transition toward an open, democratic system of governance—uniquely in the Middle East & North Africa (MENA) region—economic transition has not kept pace. Internal constraints, such as the fragmentation of the political party system and related difficulties in reaching consensus on key economic reforms, have combined with external constraints, such as conflict in neighboring Libya, to slow down economic recovery and generate growing social dissatisfaction among Tunisians with the lack of employment. Youth and women have been particularly affected by this: Tunisia is one of the few countries in the world where a higher level of education decreases employability, in particular for women. Youth and women in inland areas of Tunisia are affected the most, and the resulting outward migration of youth poses a threat to Tunisia’s long-term prospects of economic competitiveness.
Tunisia experienced weak growth of just 1.1 percent during the first half of 2019, after 2.5 percent in 2018 and 2 percent growth in 2017. This was driven by a slowdown in agriculture after growth of 9.5 percent in 2018, as well as a contraction in industry (such as oil and gas, and agrobusiness) was only partially compensated by growth in services. Inflation accelerated from 2017 to 7.8 percent in July 2018. In response, Tunisia’s Central Bank increased its policy rate to 7.75 percent and the authorities moved to enforce tighter loan-to-deposit ratios among banks and reduce injections of liquidity through Foreign Exchange (FX ) swaps. Consequently, inflation has been decelerating since the second half of 2018 to stand at 6.7 percent in August 2019. Interest rates are now all positive in real terms, except for some deposit rates. Inflation is expected to continue declining, provided monetary policy remains focused on its central goals. Growth is projected to drop below 2 percent in 2019 before starting to recover, contingent on the completion of pressing reforms to improve the investment climate and ensure greater security and social stability. Growth will be supported by expansion in agriculture, manufacturing, and tourism, and the coming online of the Nawara gas field.
The country’s unemployment rate stagnated at 15.3 percent during the first half of 2019, compared to 15.4 percent in 2018, but unemployment among women (22.6 percent in Q1-2019) and graduates (28.2 percent in Q1-2019) remains significantly higher.
The fiscal deficit widened to Tunisian Dinar (TND) 2.4 billion during the first half of 2019 (an estimated 2.1 percent of GDP) from TND 1.8 billion during the same period of 2018. Revenues increased by 18.1 percent, driven by growth in VAT revenues and customs duties. Despite the relative stagnation of capital expenditure, subsidies, and transfers compared to the first half of 2018, wages and interest payments grew by 11.1 percent and 18.5 percent respectively, while net lending almost tripled, thereby resulting in expenditure and net lending growth of 18.2 percent year-on-year.
The trade deficit reached an estimated 11.3 percent of GDP (TND 12.86 billion) during the first eight months of 2019 compared to an estimated 11.5 percent of GDP (TND 12.16 billion) during the same period last year, as exports grew by 12 percent (led by phosphate, energy, and electrical products) and imports grew by 10 percent year-on-year. This will help slightly narrow the current account deficit, also thanks to surplus in improved services (tourism) and transfers (remittances). FDI remains muted and financing has mostly been received through concessional loans from multilateral and bilateral partners. Lower Central Bank FX interventions and improved FX market functioning (with the introduction of an FX auction in mid-2018) have contributed toward protecting foreign reserves, which cover just slightly over three months of imports. The dinar has appreciated by 8.5 percent against the Euro since the beginning of 2019, reversing a multi-year trend of currency depreciation.
Tunisia’s current account deficit will remain in the double digits over the forecast period but will start to improve as of 2021 as growth picks up and energy import costs decline with the increase in local gas production.
The latest survey data available show that the share of those living at the lower-middle-income poverty line of US$3.2/day fell from 9.09 percent in 2010 to 3.21 percent in 2015.
Last Updated: Oct 01, 2019
* What is the biggest misconception people have about your area?