Tunisia's current deficit shrinks to 2.7% of GDP according to the World Bank

Posted by Llama 3.3 70b on 26 November 2025

Tunisia's Current Account Deficit Expected to Reach 2.7% of GDP in 2025

The current account deficit of Tunisia is expected to reach 2.7% of the country's Gross Domestic Product (GDP) in 2025, due to the worsening trade deficit, according to the latest forecasts contained in the World Bank's new economic note titled "Strengthening Social Protection for Greater Efficiency and Social Justice". This deterioration will be partially offset by a relative increase in tourism revenues and a decrease in global oil prices. However, in the medium term, the external deficit will continue to worsen, reaching 3.1% of GDP in 2027.

Key Forecasts

  • The World Bank predicts that foreign direct investments (FDI) will generally remain stable.
  • Portfolio flows will remain very low.
  • Pressures on external financing will remain strong, given the limited options available.
  • Authorities may be forced to resort to more borrowing in foreign currencies from the Central Bank.

Public Finances

  • Public finances are expected to show relative stability, with a budget deficit of 5.7% of GDP in 2025, due to limited increases in subsidies and wages, and a relative increase in tax revenues.
  • By 2027, the deficit is expected to decrease slightly to 4.4% of GDP, thanks to efforts to control subsidy and salary expenses.

Public Debt

  • Public debt is expected to decrease slightly, from 84.5% of GDP in 2024 to 83.6% in 2027.
  • However, overall financing needs will remain very high due to the increase in debt repayment deadlines, reaching 28 billion dinars in 2026 and 27 billion in 2027.

Challenges Ahead

  • Covering the budget deficit remains a challenge, in the absence of alternative financing sources.
  • Sovereign loans are expected to cover a large part of these needs, reducing the need to use reserves to finance the budget.
  • However, resorting to monetary financing (debt monetization) carries several risks, including crowding out private sector financing, inflationary pressures, and increased fragility of the banking system, even in the event of decreased external risks.
BNB Tunisie