Tunisia Household purchasing power down 8% from 2018‑2024, warns IACE

Tunisia’s Purchasing Power Decline (2018‑2024) – An IACE Analysis

Source: Institut d’Analyse et de Conjoncture Économique (IACE) – “L’amélioration du pouvoir d’achat des ménages” (2024)

Key Findings

Indicator	2018‑2024 Trend
Real household income per capita	↓ ≈ 8 %
Inflation (annual average)	5.7 % – 9.3 % (above the historic ceiling of 5 %)
Average negotiated wage growth	5 % (historic average)
Savings rate	8.6 % (2021) → 2.5 % (2024)
Household debt	D 29.5 bn (end‑2024) vs. D 26.6 bn (end‑2021) → +11 % in 3 years
• Consumer credit	D 4.1 bn → D 5.1 bn (+25 %)
• Mortgage credit	D 22.2 bn → D 24.0 bn (+8 %)
• Vehicle loans	D 378 m → D 408 m (+8 %)
Delinquency level	Rising (as reported by the Central Risk Office)

“The loss of purchasing power has generated greater budget pressure on households, a growing difficulty to cover essential expenses, and a continuous feeling of impoverishment.” – IACE analysis note.

Why Salaried Households Are Hit Harder

Inflation outpaced wages: Over the seven‑year period, inflation exceeded wage growth by roughly 2 percentage points per year, amounting to a cumulative 14 % gap.
Disposable income erosion: Mandatory taxes, external levies, and persistent inflation (especially since 2022) have squeezed net income.

Shifting Household Expenditure Structure

Food share – Rising again, a classic sign of impoverishment.
Housing & health costs – Consuming an ever‑larger slice of the budget.
Result – Forced trade‑offs, shrinking financial flexibility, and a sharp drop in savings capacity.

Consequences

Savings rate fell from 8.6 % (2021) to 2.5 % (2024), limiting resilience to economic shocks.
Household indebtedness surged, with consumer credit growing 25 % while mortgage and vehicle loans only modestly increased.
Higher delinquency rates signal growing stress on borrowers.

Recommendations to Boost Purchasing Power

1. Macro‑Economic Measures

Policy	Rationale
Broaden the tax base – combat tax evasion, integrate the informal sector.	Increases fiscal space without raising rates.
Digitalize transactions & electronic payments – enable effective, real‑time tax collection.	Improves compliance and reduces leakage.
Index wages to inflation.	Aligns income growth with price dynamics, closing the wage‑inflation gap.
Monetary policy vigilance – monitor money supply so that credit creation matches real‑sector production needs.	Prevents excess liquidity that fuels inflation.
Exchange‑rate management – keep currency pressures from feeding price spikes.	Stabilizes import‑priced goods.

2. Industrial & Structural Policies

Promote high‑productivity sectors (renewable energy, water, ICT, biotech).
Target subsidies & tax exemptions to firms that deliver measurable productivity gains and integrate into global supply chains.
Aim for a higher share of locally‑added value in exported and domestically produced goods.

3. Micro‑Economic Reforms

Rationalise distribution channels – streamline supply‑chain logistics.
Boost market efficiency – develop organized wholesale markets, modern slaughterhouses, etc.
Mandate invoicing for all transported and sold goods; digitise invoices and transactions.
Enhance transparency – fight fiscal evasion, improve public‑sector accounting.
Reduce logistics costs – invest in infrastructure, adopt digital tracking, and optimise transport routes.

Outlook

If the recommended macro‑ and micro‑level reforms are implemented, Tunisia can re‑ignite investment‑driven growth, which the IACE identifies as the most reliable engine for restoring household purchasing power. Until then, the current trajectory suggests continued debt accumulation and diminishing savings, deepening the vulnerability of Tunisian families.