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Tunisia growth set to be lower than expected as budget deficit increases

September 8, 2022 at 1:17 pm

Shows containers being transported at the port of Rades in Tunis on October 5, 2018, [Photo by FETHI BELAID / AFP]

“The Tunisian economy is on a growth path that is slightly lower than what was previously expected,” the World Bank warned in a new report, as the country’s budget deficit increases.

The report noted that Tunisia’s economic growth would be in the range of 2.4 per cent as a result of the decline in consumption and public investment.

It also suggested that economic growth in Tunisia would rise to 3.1 per cent if the pace of recovery continues as it was before Russia’s war on Ukraine, stressing that this optimistic scenario, however, remains less likely than the first.

READ: Inflation in Tunisia rises to 8.6% in August

At the beginning of the year, the World Bank expected economic growth in Tunisia to be in the range of 2.7 per cent, a rate that a number of Tunisian experts in the economy and finance believe is unattainable in light of the country’s depleting financial budgets, and the weak resources to finance the budget, in addition to the high cost of food and energy over the past months. This has had a direct impact on the state’s resources and the subsidisation of a number of consumer products.

The World Bank said it expected the rise in prices in international markets to lead to an increase in the Tunisian budget deficit.