Tunisia's Economic Outlook Remains Challenging in 2024, According to World Bank Report
A report titled "Equity and Efficiency of the Tunisian Tax System" by the World Bank presents a mixed assessment of Tunisia's economic prospects in 2024.
Stagnant Economic Growth
With economic growth stagnating at around 0.6% in the first half of the year and projected to reach 1.2% for the year, Tunisia is struggling to regain a sustained growth pace, hindered by structural challenges and prolonged drought.
Limiting Factors
According to the report, Tunisia's economic recovery is hampered by several factors, including:
- Tight external financing conditions, affecting key sectors such as agriculture, energy, and construction.
- Persistent drought, complicating agricultural recovery, and a lack of investments, hindering industries like textiles and energy. As a result, domestic demand is weakening, weighing on the entire economy.
- Rising unemployment, reaching 16% in the second quarter, and a labor market participation rate that remains below pre-pandemic levels, indicating structural fragility.
Commercial Challenges
Although the trade deficit has been reduced thanks to improved global prices and increased tourism revenue, the energy sector continues to weigh heavily, representing 62.9% of the deficit.
Financing Challenges
To address the lack of external financing, the government has authorized the Central Bank to finance the budget, a measure that, while stabilizing the dinar, raises concerns about increased pressure on inflation.
Solutions Proposed by the World Bank
To restore fiscal balance, the World Bank recommends:
- Revising tax rates on capital and labor
- Introducing a carbon tax
- Strengthening property taxation
- Reviewing tax exemptions
These measures aim to reduce inequalities, make taxation more progressive, and support the economy in the face of structural and climate challenges.
