Tunisia¡¯s economic outlook remains highly uncertain. The economic recovery is less robust than previously expected given the escalation of the COVID-19 pandemic in mid-2021 and the heightened political uncertainty. This increases the downside risks particularly regarding debt sustainability, which is a source of increasing concerns. Moving out of the crisis zone and fast-tracking the recovery will require a solid political settlement and the speedy implementation of structural reforms.
A decade after the Jasmin revolution, Tunisia faces increasingly difficult economic and political conditions. Persistent political instability has prevented the implementation of reforms to open up an economy that remains closed to investment and trade.
Due to the COVID-19 pandemic, growth and private job creation stagnated, obliging the state to step in to provide jobs and guarantee affordable consumption of goods and services. To mitigate COVID-19 socio-economic impacts, public spending affected fiscal balance under the weight of a large public sector wage bill, state-owned enterprises, and consumer and producer price subsidies.
, below that in the first semester. This lower growth is due to the weakening of the base effect and the worsening of the pandemic. The uptick is not large enough to return output to pre-pandemic levels of 2019.