Tunisian Economist Sounds Alarm on High Inflation Rate
Tunisian economist Larbi Benbouhali, director at an investment bank in Australia, has raised concerns about the persistence of a high inflation rate in Tunisia, despite official stabilization around 5%. In an analysis published on his Facebook page, he explains that this average masks a more significant increase in prices felt by households.
Key Statistics
According to data from the National Institute of Statistics (INS), cumulative inflation over the first nine months of 2025 reached 5.5%. Specifically:
- Agricultural products saw a 13.6% increase
- Clothing prices rose by 9.5%
- Banking and insurance services increased by 8.2%
Benbouhali highlights that the multiplicity of intermediaries in distribution channels amplifies the increase in wholesale prices, which in turn affects consumer prices.
Stock Market Performance
The Tunis Stock Exchange (BVMT) has progressed by 21% since the beginning of the year, mainly driven by the banking, insurance, and large retail sectors, which, according to Benbouhali, hold a "price-setting power" that fuels inflation. Meanwhile, the minimum wage (SMIG) increase was only 2.6%, exacerbating the loss of purchasing power for households.
Critique of Monetary Policy
Benbouhali believes that the restrictive monetary policy of the Central Bank of Tunisia (BCT), with a benchmark interest rate maintained at 7.5%, slows down consumption without curbing price increases. He also criticizes the 12% increase in tax revenues in 2025, which, in his opinion, has weighed more heavily on investment and production than on reducing the deficit.
Comparison with Trading Partners
Comparing Tunisia to its trading partners, the economist notes that inflation rates are:
- 2% in Europe
- 1.8% in Libya
- 3.7% in Algeria
- 2.2% in Morocco This gap, according to Benbouhali, exacerbates the depreciation of the dinar and increases imported inflation.
Recommendations
To reduce prices, Benbouhali recommends that the BCT:
- Buy back debt from the Office of Cereals
- Provide low-interest loans to farmers, STEG, and ETAP to reduce production and energy costs He also calls for a reduction in corporate tax and support for Tunisian companies wishing to export to Libyan and Algerian markets.
Conclusion
In conclusion, Benbouhali advocates for close coordination between the BCT and the government to:
- Lower the benchmark interest rate to 5%
- Bring inflation down to 2% over 12 months He urges authorities to redirect bank credits towards productive sectors, particularly agriculture and industry, to stimulate growth and contain the inflationary spiral.
