Economic Growth Rate Falls Short of Government Estimates
The estimated growth rate for 2024 was 1.6% according to the government, but the actual figures show a rate of 1.4%. The last quarter was relatively good, with a 2.4% increase in value added year-over-year. However, it's essential to consider the favorable base effect, as the last quarter of 2023 saw a 0.6% decline in GDP. Moreover, in sequential terms, the GDP of the fourth quarter of 2024 evolved by 0.9%.
The last quarter benefited from local consumption and gross fixed capital formation, which grew by 7.1% year-over-year and 2.9% sequentially. By sector, agriculture outperformed with a 12.5% increase compared to the same period in 2023. Construction and services showed improvements in their value added of 2.5% and 1.9% year-over-year, respectively. Only the industrial sector showed signs of weakness, declining by 0.9%. The decline is attributed to the extractive industries and waste treatment, which fell by 7.9%. The problems in the mining basin continue to weigh heavily on the Tunisian economy, and it's time to find a definitive solution to overcome this blockade. The manufacturing industry performed well, particularly the chemical (+8.1%) and mechanical and electrical (+2.5%) sectors.
In light of these figures, we believe that 2025 will be a challenging year. Firstly, achieving the targeted 3.2% growth rate will be difficult. There are doubts surrounding local demand, which is heavily impacted by the new check regulation and inflation. Investment is still stifled by high interest rates and the reduced market size. Agriculture may continue its rebound with the satisfactory rainfall season so far, but the falling prices of olive oil will pose a challenge to the agri-food industry. In short, we face many challenges in the new year.
