Tunisia's Wages Under Pressure as Inflation and Taxes Bite
Tunisia's purchasing power is facing growing pressure, amidst a backdrop of continuous inflation and rising taxes that are impacting the cost of living and consumption levels, despite periodic salary increases. The latest salary hikes, which are set to benefit 3.6 million public and private sector employees, are insufficient to improve the standard of living of citizens, according to economic expert Maher Belhaj.
Salary Increases Insufficient to Boost Purchasing Power
Belhaj noted that the increase in gross salaries does not reflect the net salary received by employees after deducting various taxes and social contributions. This results in a reduction of the salary increase before it has a real impact on the purchasing power of employees.
For example, senior executives who are set to receive a gross salary increase of 120 dinars will only receive a limited portion of this amount after deducting taxes and social contributions. This explains why there is no sense of improvement in living conditions despite the announced salary increases.
Inflation Continues to Rise
According to the National Institute of Statistics (INS), the consumer price index (CPI) rose to 5.5% in April 2026, up from 5% in March of the same year. The main driver of this increase is the acceleration of price growth in food products, which rose by 8.2% compared to 6.8% in March. The prices of clothing and footwear also increased by 9.3% compared to 7.5% in March.
Price Growth by Product Category
- Food products: 8.2% (up from 6.8% in March)
- Clothing and footwear: 9.3% (up from 7.5% in March)
- Services: 4.2% (up from 3.8% in March)
- Housing: 3.5% (up from 3.2% in March)
Causes of Price Growth
Economic expert Maher Belhaj attributed the price growth to the dysfunction of distribution channels and the dominance of intermediaries and speculators on the market. This has led to an increase in profit margins between producers and consumers, resulting in unjustified price increases for many basic products.
Fiscal Pressure on Salaries
Belhaj also noted that the fiscal pressure on salaries has become one of the main factors contributing to the exhaustion of the middle class. The state relies heavily on direct taxes on salaries, due to limited revenue from the parallel economy and certain unstructured sectors.
Impact on Consumption and Economic Growth
Consumption is one of the main drivers of economic growth, but the erosion of purchasing power among employees is hindering their ability to spend and negatively impacting the economic cycle and internal demand dynamics.
Salary Increases Lose Impact as Inflation Rises
Belhaj emphasized that salary increases lose their impact when inflation rises at a faster rate than net salaries. This results in a decline in the real salary of citizens, or their effective ability to consume, despite the increase in nominal income.
Structural Reforms Needed
To combat the crisis of purchasing power, Belhaj called for deep structural reforms, including:
- Revision of taxable income categories
- Reduction of fiscal pressure on employees
- Control of inflation
- Reform of distribution channels
- Fight against monopolies
- Improvement of productivity
Salary Increases Must Be Accompanied by Productivity Growth
Belhaj also noted that salary increases must be accompanied by productivity growth and effective economic growth to produce durable results. A rise in salaries without creation of wealth or improvement of business profitability risks increasing production costs and fueling inflation, thereby canceling out the effect of salary increases on prices.
Legislative Measures
The decree n°63 of 2026 provides for salary increases for public sector employees through the revaluation of various specific primes covering a wide range of specialties and sectors. The decree n°64 of 2026 concerns employees of public enterprises and establishments, while the decree n°65 of 2026 provides for an increase in the magistrature prime of 120 dinars per year over three years (2026-2028) for magistrates of the judicial, administrative, and financial orders. These measures aim to improve the purchasing power of public sector categories while respecting financial balances and satisfying citizen expectations.
