EBRD projects modest 1.2% growth for Tunisia in ’24

Tunisia’s economy is forecast to grow by a modest 1.2 per cent in 2024, according to the European Bank for Reconstruction and Development (EBRD), with a slight improvement to 1.8 per cent expected in 2025.

According to the EBRD’s latest regional Economic Prospects report released on Thursday, the growth is supported by recovering exports and increased domestic demand as inflation continues to ease, dropping to a 30-month low of 7.0 per cent in July 2024.

Following a slowdown to almost zero per cent growth in 2023, the country’s GDP grew by 0.6 per cent year-on-year in the first half of 2024.

“Although there was a contraction in agriculture – due to severe drought- and mining, expansion occurred in the tourism, financial services and some industrial sectors. Growth was supported by recovering exports  – including of olive oil, mechanical and electrical goods – and domestic demand amid easing inflation – which dropped to a 30-month low of 7 per cent in July 2024.” the report read.

“Growth is forecast to remain modest in the short term at 1.2 per cent in 2024 and 1.8 per cent in 2025, supported by lower inflation, a strong current account, and continued reform efforts. Significant downside risks include the limited fiscal space, large external debt and the economy’s vulnerability to external and climate shocks.”

The EBRD notes that downside risks remain for Tunisia, including limited fiscal space, high external debt, and vulnerability to external shocks. However, Tunisia’s economic outlook improved after Moody’s upgraded the country’s credit rating outlook to stable in March 2024, supported by access to external funding despite slow progress on an IMF-backed reform programme.

Attribution: EBRD Regional Economic Prospects

Subediting: Y.Yasser