Tunisian Economy Shows Signs of Recovery
The Tunisian economy is exhibiting signs of recovery, supported by a more robust agricultural production, a resurgence of activity in the construction sector, and an improvement in tourism, according to the latest economic note from the World Bank titled "Strengthening Social Safety Nets for Greater Efficiency and Equity." The real GDP progressed by 2.4% during the first nine months of 2025, following years of moderate growth and the lingering effects of the COVID-19 crisis.
Economic Growth Projections
Economic growth is expected to reach 2.6% in 2025 and stabilize around 2.4% in 2026-2027. Favorable weather conditions and a resurgence of activity in key sectors are expected to support the recovery. However, structural constraints - including limited external financing, stagnant productivity growth, and insufficient investment levels - continue to weigh on medium-term prospects.
Macroeconomic Indicators
Other macroeconomic indicators show that inflation has continued to decline for the seventh consecutive month, reaching 4.9% in October, after peaking at 10.4% in February 2023. This decline is primarily attributed to the decrease in global energy and cereal prices, with food inflation retreating to 5.6%. The current account deficit widened to 2% of GDP in the first half of the year, due to an increase in imports and stagnant exports.
External Pressures and Investment
However, the solidity of tourism revenues and remittances from Tunisians living abroad have contributed to mitigating external pressures. Foreign direct investment increased by 41% during the first seven months, driven by projects in renewable energy, supporting external stability despite limited access to international markets.
Budget and Public Debt
On the budgetary front, the public deficit was reduced to 6.3% of GDP in 2024, while public debt stood at around 84.5% of GDP.
Social Protection System
The special chapter of the report examines the Tunisian social protection system, with a focus on social assistance programs. The analysis shows that the AMEN cash transfer program has played a central role in reducing poverty and inequality, with its coverage tripling over the last decade to reach around 10% of the population.
Recommendations
The report suggests continuing efforts to improve targeting and equity, while further developing digital tools, and emphasizes the importance of strengthening economic inclusion and gradually extending insurance to informal workers, in order to move towards a more effective and equitable system.
Quote from World Bank Representative
"Tunisia has made significant progress in covering the poorest," notes Alexandre Arrobbio, the World Bank's Resident Representative for Tunisia. "In line with the emphasis our partnership with Tunisia places on human capital and resilience, improving the efficiency and equity of social safety nets could reduce inequalities and stimulate economic inclusion of vulnerable households."
Conclusion
Continuing to preserve macroeconomic stability and strengthen budget viability, while extending targeted social protection, will be essential to ensuring shared prosperity for the entire Tunisian population. It is also crucial to pursue initiatives aimed at improving the performance of public enterprises and enhancing competition and the investment climate.
