Prices in Tunisia: A Mixed Bag
While prices continue to soar in Tunisia, not all product categories are affected. The National Institute of Statistics (INS) provides us with the opportunity to examine the evolution of prices at the end of June 2024 compared to the end of December 2023.
Some Products and Services Remain Unchanged
Certain products and services have not budged, including:
- Electricity, gas, and other fuels
- Hospital services
- Postal services
- Pre-elementary, primary, and secondary education
- School books
- Insurance
The common thread among these products and services is that they are either entirely or mostly publicly provided. The state is intervening to curb price hikes in these areas, thereby maintaining the lowest possible price index. These products and services represent 7.4% of the Consumer Price Index (CPI), which means that if they were to increase, it would impact overall inflation.
The Energy Factor
This is particularly true for energy-related products, which would immediately affect the prices of all other products. This is the other side of the coin in the efforts to control inflation. This social policy protects vulnerable classes and ensures a minimum purchasing power, even if it is eroding. At the same time, the state budget is shouldering the heavy burden of compensation, which is pushing it to tighten fiscal policy on one hand and increase its resource needs in the internal market on the other.
A Vicious Cycle
Paradoxically, this will mechanically drive up production costs, and therefore the prices of all other products and services provided by the private sector. This creates a vicious cycle that condemns us to prolonging the path to recovery.