The World Bank (WB) has revised downwards its growth forecasts for Tunisia in 2022 and expects a rate of 3% against previous estimates (January 2022) of 3.5%.
This projected growth of 3% in 2022 is supported by a gradual global recovery from the pandemic, the WB pointed out in its latest economic update for the Middle East and North Africa (MENA) region entitled: “Reality Check: Forecasting Growth in the Middle East and North Africa in Times of Uncertainty”.
“Growth is expected to eventually gain momentum but remains modest at around 3.5% per annum over the medium term, driven by pre-existing structural challenges and economic conditions. Consequences and uncertainties around the war in Ukraine and associated sanctions”.
The WB also projects an inflation rate of 6.5% in 2022 and 2023 and a poverty rate of 3.4% in 2022 and 3.1% in 2023.
The number of poor and vulnerable people at the USD 5.5 threshold (2011 PPP) is projected to fall from 18.9% in 2022 to 17.7% in 2023 and is not expected to return to pre-crisis levels until 2024.
Uncertain outlook
Tunisia’s economic outlook remains highly uncertain, the WB said, noting that the economic rebound in 2021 has been relatively muted. Concerns about debt sustainability remained acute due to budget deficits and high financing needs.
The main factors behind the modest recovery include the economy’s relative dependence on tourism, as well as limited fiscal space and a challenging business environment, including restrictions on investment and competition.
“As a net importer of energy and grains, Tunisia is vulnerable to global commodity price spikes due to the impact of the war in Ukraine. Accelerating the recovery and safeguarding macroeconomic stability will require the rapid implementation of structural reforms.
According to the WB, Tunisia is also facing difficulties in maintaining its food subsidies. However, rising oil prices could delay reforms, as subsidies could rise with global food and energy prices.
