Economy of Tunisia

Economy of Tunisia
Tunis
Currency Tunisian dinar (TND)
Statistics
GDP

$40.29 billion nominal (2017)[1]

$136.8 billion PPP (2017) [1]
GDP growth
 1.0% (2015), 1.2% (2016),
1.9% (2017e), 2.4% (2018f) [2]
GDP per capita
 $3,553 (2017)[1]
GDP by sector
 agriculture: 11%; industry: 35.3%; services: 53.7% (2009 est.)
7.6% (March 2018)[3]
Population below poverty line
 15.5% (2010)[4]
36.1 (2010)[5]
Labour force
 3.315 million (2013)
Labour force by occupation
 agriculture: 18.3%; industry: 31.9%; services: 49.8% (2009 est.)
Unemployment 14.7% (December 2017)[6]
$275 monthly (2017)[7]
Main industries
 petroleum, mining (particularly phosphate and iron ore), tourism, textiles, footwear, agribusiness, beverages
Decrease88th (2018)[8]
External
Exports $12.9 billion (2016)[9]
Export goods
 clothing, semi-finished goods and textiles, agricultural products, mechanical goods, phosphates and chemicals, hydrocarbons, electrical equipment
Main export partners
  France 29.7%
 Italy 17.1%
 Germany 11.5%
 Algeria 5.4% (2014)[10]
Imports $18.8 billion (2016)[9]
Import goods
 textiles, machinery and equipment, hydrocarbons, chemicals, foodstuffs
Main import partners
  France 19.9%
 Italy 19.5%
 Germany 7.6%
 China 5.5%
 Spain 5.4%
 Turkey 4.1% (2014)[11]
FDI stock
 $31.86 billion (31 December 2009 est.)
$27.86 billion (2014)[12]
Public finances
50.03% of GDP (2014)[13]
Revenues $11.89 billion (2014)
Expenses $13.66 billion (2014)[13]
Foreign reserves
 US$7.047 billion (October 2015)[16]
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

Tunisia is in the process of economic reform and liberalization after decades of heavy state direction and participation in the economy. Prudent economic and fiscal planning have 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.[17] Based on HDI latest report (for 2014), Tunisia ranks 96th globally and 5th in Africa.

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.[18]

Historical trend

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.[19]

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 tariff 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 work force. An estimated 55% of the population is under the age of 25. Officially, 15.2% of the Tunisian work force 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,[20] 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.[21]

The following table shows the main economic indicators in 1980–2017. Inflation under 5 % is in green.[22]

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

External trade and investment

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.[23]

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.

In November 29 and 30th, 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.[24]

Loan Guarantee[25]

On April 20, 2012, U.S. Treasury Secretary[26] and Tunisian Finance Minister Houcine Dimassi signed a declaration of intent[27] 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.

Electricity

  • Production: 16.13 Billion kWh (2011)[28]
  • 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)

Agriculture

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

See also

References

  1. 1 2 3 "Report for Selected Countries and Subjects". www.imf.org.
  2. ↑ "World Bank forecasts for Tunisia, June 2018 (p. 152)" (PDF). World Bank. Retrieved 6 September 2018.
  3. ↑ tradingeconomics.com/tunisia/inflation-cpi
  4. ↑ "Archived copy" (PDF). Archived from the original (PDF) on 24 September 2015. Retrieved 29 October 2014.
  5. ↑ "GINI index (World Bank estimate) - Data". data.worldbank.org.
  6. ↑ "Tunisia - unemployment rate 2007-2017 - Statistic". Statista.
  7. ↑ "Rankings by Country of Average Monthly Net Salary (After Tax) (Salaries And Financing)". www.numbeo.com.
  8. ↑ "Ease of Doing Business in Tunisia". Doingbusiness.org. Retrieved 2017-11-24.
  9. 1 2 "OEC - Tunisia (TUN) Exports, Imports, and Trade Partners". atlas.media.mit.edu.
  10. ↑ "Export Partners of Tunisia". CIA World Factbook. 2012. Retrieved 2013-07-27.
  11. ↑ "Import Partners of Tunisia". CIA World Factbook. 2012. Retrieved 2013-07-27.
  12. ↑ "The World Factbook — Central Intelligence Agency". www.cia.gov.
  13. 1 2 "Tunisia 2018".
  14. ↑ "Sovereigns rating list". Standard & Poor's. Retrieved 26 May 2011.
  15. 1 2 3 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.
  16. ↑ "International Reserves and Foreign Currency Liquidity - TUNISIA". International Monetary Fund. 18 April 2011. Retrieved 31 May 2011.
  17. ↑ "Competitiveness Rankings".
  18. ↑ Solutions, EIU Digital. "Tunisia Economy, Politics and GDP Growth Summary - The Economist Intelligence Unit". country.eiu.com.
  19. ↑ "Tunisia: GDP per capita". "Index Mundi". Retrieved 2012-07-02.
  20. ↑ "CIA World Factbook". cia.gov. CIA. Archived from the original on 16 October 2012. Retrieved 16 July 2015.
  21. ↑ "Tunisia's tourism grappling with job losses". BBC World. July 15, 2015. Retrieved 16 July 2015.
  22. ↑ "Report for Selected Countries and Subjects". www.imf.org. Retrieved 2018-10-07.
  23. ↑ "Archived copy". Archived from the original on 5 December 2006. Retrieved 2009-12-31.
  24. ↑ "Hoping to preserve democracy, Tunisia woos foreign investors".
  25. ↑ "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 2012-06-13.
  26. ↑ Timothy Geithner
  27. ↑ "FAQs: U.S. LOAN GUARANTEE FOR TUNISIA" (PDF). U.S. Department of the Treasury. Archived (PDF) from the original on 2014-07-27. Retrieved 2012-09-13.
  28. ↑ "Nation Master".

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