Tunisia posts lowest growth prospects in southern Med- EBRD

The Tunisian economy continues to reel under the impact of the President Kais Saied’s power grab. The country is expected to be the least performer in the southern Mediterranean region, compared to its peers, the European Bank for Reconstruction and Development (EBRD) said.

While the region’s economic growth is expected to stand at 3.7% in 2024 before improving to 4.1% in 2026, prospects for Tunisia remain low at 1.8% in 2025 and 2.2% in 2026, according to EBRD estimates.

Macroeconomic indicators are dim. Tunisian inflation hit 16% in the second half of 2024, while the fiscal deficit is seen at 6.3% of gdp this year, with a public payroll accounting for 13.3% of GDP.

Tunisia has rejected an IMF deal of 1.9 billion dollars, which required subsidy and civil service reform.

The Tunisian government has opted for domestic loans after its foreign debt surged to 82.2% of GDP.

To do so, Kais Saied extended his power grab to the central bank urging the parliament to adopt a law that would enable the bank to lend directly to the treasury. The move mimics Algerian money-printing policies which undermined the value of the dinar.

Tunisia’s foreign exchange reserves remain stable at 25 billion dinars ($ 7.6 bln), covering 3.5 months of imports.