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Tunisia’s reform policies improve outlook for country’s economic growth, say experts

Tunisia’s reform policies improve outlook for country’s economic growth, say experts
21 Nov 2023 09:32

SHABAN BILAL (TUNIS, CAIRO)

International reports, experts, and analysts expect the Tunisian economy to regain its pre-COVID-19 growth rates by mid-2030. There are many indicators confirming that the country’s economy has been recovering in recent months, despite many unresolved issues.

Monther Thabet, a Tunisian economic analyst, stated that the Tunisian economy’s growth prospects were positive, especially since the major economic balance indicators improved due to the unannounced austerity measures and repayments to foreign debt services. Over 90% of the debts scheduled for repayment this year have been completed.
Thabet explained to Aletihad that inflation could be controlled despite rising to over 9%-a high but reasonable rate, given the scarcity of external financial resources and various economic crises like COVID-19. There is a problem regarding revitalising investments, which requires the elimination of bureaucratic barriers that hinder the entry of foreign investment.

The economic analyst pointed out that the economic situation in Tunisia was saved by returning phosphate production to high levels, remittances from workers abroad, and a successful tourism season. He emphasised the need to maintain this level, particularly as the primary challenge is reducing the tax burden to expand foreign investment attractiveness, as the business climate for the private sector is discouraging.

Thabet mentioned that the economic system is also undergoing an administrative reform. The financial cleansing of public institutions is expected to restore economic growth levels to their previous state, as the debt level of public institutions had become a burden on the state, which is trying to save them from bankruptcy.The Tunisian economic analyst added that the Tunisian General Labour Union (UGTT) has a vision for economic improvements, but President Kais Saied views the issue strategically. In a country like Tunisia, characterised by structural economy fragility, it cannot function without institutions that serve as the state’s arm to restore balance to the market and solve social problems, he said.

Hazem Al Kasuri, President of the Free Tunisia Forum, told Aletihad that he believes that the Tunisian economy, like many other world economies, has gone through a crisis.

Despite this, it has managed to achieve a balance thanks to President Saied’s corrective measures, such as relying on self-sufficiency, enforcing austerity measures, continuing the fight against terrorism and corruption, and opening cases investigating embezzled funds and tax evasion, Al Kasuri said.
The World Bank predicts a slight decline in Tunisia’s inflation rates due to a relatively large production gap in the post-pandemic stage and the slight increase in public sector wages after an agreement was reached between the government and the UGTT last year.

He pointed out that the medium-term prospects are dependent on the continuation and ambition of reforms, sufficient financing conditions, and the stability of international energy prices, especially fossil fuels.

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