The budget deficit is expected to improve to 8. The current account deficit is also expected to narrow over the medium term to 4. The major risks to this scenario are a third wave of the pandemic, political instability at the national and regional level, an increase in popular protests against social conditions, insufficient access of companies to financial resources, and a slower-than-expected recovery of European economies on which Tunisian exports depend heavily.
Tunisia is vulnerable to exogenous shocks, mainly to currency risk because of the high concentration of external debt. The financial difficulties of public establishments and enterprises is another area of concern. Skip to main content. Recent macroeconomic and financial developments COVID—19 has infected many Tunisians and severely damaged the economy in this North African nation, which is heavily dependent on Europe.
African Economic Outlook To cope with rising food prices or make up for jobs losses, households either drew on their savings, accepted outside financial help, or borrowed money from relatives and deferred payment of any outstanding obligations. The current account deficit remained high, at 6. Meanwhile, the balance of services went from a positive balance of million dinars to a negative balance of Trends in the first months of this year are positive, as higher exports—mainly from industrial production—contribute to lower external financing needs and lessen pressure on reserves.
But external risk remains significant. The wage bill increased to about These developments are worsening debt vulnerabilities. As a result, total revenues tax and non-tax rose by 1. At the same time, expenditures decreased by 2. The fall in subsidies and interventions Overall, the budget deficit decreased by After an 8.
Market services are suffering from containment health measures, travel restrictions, and the slow pace of vaccination. Political, social, and economic uncertainty remain high; early economic forecasts could be adjusted downwards. The outlook for reforms being put into place to support economic recovery is challenging: With the population already strained by the unprecedented shock of COVID, any space there had been to improve the fiscal outlook—by reducing both the wage bill and the cost of untargeted subsidies—has been narrowed by heightened levels of social and political tension.
Structural reforms, made to address SOE performance, increase market contestability, and clamp down on corruption are even more necessary now than before, but national political dialogue and buy-in for such reforms have yet to emerge. Following the increase in poverty in , it is expected to begin dropping again from onwards, but at a slow pace and with important risks related to the pace of the economic recovery and the capacity of the authorities to cushion the population from the impact COVID within the context of a tight budget.
The Bank has provided a fast and flexible response to the COVID pandemic by using its operational and policy instruments and by working in close partnership with governments and other development agencies. A new Social Protection Emergency Response Project was also issued in March to address the impact of the pandemic on the most vulnerable. The project is providing cash transfers for about 1 million vulnerable Tunisian households to help them deal with the economic impact of the COVID crisis.
Further programming will be defined by the new CPF, which is expected to be finalized in early FY Its intervention will focus on: i a more effective and resilient public sector, designed to improve services to individual citizens and the private sector; ii restoring a business environment conducive to sustainable economic growth and private sector-led job creation; and iii enhancing services to citizens for social, economic, and regional inclusion.
The Tunisia Economic Monitor sheds the light on drivers of the sharper decline in growth than most of its regional peers and suggests a coherent plan for restarting the economy and restoring the credibility of the This report identifies key factors weighing on Syrian refugees contemplating a return home and analyzes how changing conditions in Syria might affect their decisions.
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