GDP growth in Tunisia projected at 1.2% for the whole of 2023, a downward revision of 1.1% from the June 2023 forecasts.
The World Bank’s forecasts also anticipate a 3% growth rate in 2024 and 2025, according to a fresh World Bank’s Global Economic Prospects report, published on Wednesday.
This report in fact reaffirms the same estimates made in an economic situation report on Tunisia, published last November by the WB.
Tunisia’s GDP growth for 2023 was forecast to be around 1.2 percent, a modest recovery when compared to counterparts in the region and half the growth rate of 2022. A growth forecast of 3 percent in 2024 is subject to risks created by the evolution of the drought
Tunisia’s economic recovery slowed in the first half of 2023 as the country continued to grapple with persistent drought, external financing challenges, increasing domestic debt build-up of important public service enterprises and regulatory obstacles, according to the World Bank’s Fall 2023 Economic Monitor of Tunisia.
The repo
rt points out that “the recent conflict in the Middle East has increased geopolitical and policy uncertainty in the Middle East and North Africa (MNA) region and dampened tourism-related activity, particularly in neighbouring countries. MNA already faced multiple headwinds, including oil production cuts, elevated inflation, and weak private sector activity in oil-importing economies. In 2023, growth in MNA slowed down sharply to 1.9 percent.
The WB considers that “the conflict in the Middle East has heightened uncertainty around growth forecasts in the region. Assuming the conflict does not escalate, growth in MNA is expected to pick up to 3.5 percent in 2024 and 2025. Forecasts have been revised upward, relative to what was expected in June, reflecting stronger-thanexpected growth among oil exporters supported by rebounding oil activity.”
“Growth in GCC countries is forecast to rise to 3.6 percent in 2024 and 3.8 percent in 2025. In Saudi Arabia, growth is projected to rebound due to an expansion in the co
untry’s oil output and exports, despite an extension of voluntary oil production cuts into this year. Among other oil exporters, the expansion of oil production as a result of relaxed production cuts in early 2024 is projected to contribute to faster growth in Algeria and Iraq.”
“In oil importers, growth is expected to edge up to 3.2 percent this year and 3.7 percent in 2025. Growth will rise in some countries, including Djibouti, Morocco, and Tunisia, but countries located closer to the conflict will be more adversely affected. In Egypt, the conflict will likely exacerbate the inflation problem, constrain activity in the private sector, and intensify pressures on external accounts through reduced tourism revenues and remittances. The conflict will adversely affect the tourism sector in Jordan, as well.”
“A severe downside risk to regional growth is the intensification of the conflict, including spillovers to neighboring economies and a surge in refugees. Countries in MNA are vulnerable to natural disasters
, and climate change continues to increase the frequency and severity of adverse weather events. In oil exporters, if oil prices fall or demand gets weaker, oil production could be limited, and the cuts could be prolonged. In oil importers, tighter global financial conditions would weaken growth prospects because of large external financing needs.”
Global growth is projected to slow for the third year in a row-from 2.6% last year to 2.4% in 2024, almost three-quarters of a percentage point below the average of the 2010s. Developing economies are projected to grow just 3.9%, more than one percentage point below the average of the previous decade. The slowest half-decade of GDP growth in 30 years, according to the World Bank’s latest Global Economic Prospects report.
Source: Agence Tunis Afrique Presse