The Gross Domestic Product (GDP) fell by 8.8% in 2020 compared to 2019, According to figures provided Monday, February 15, 2021 by the National Institute of Statistics (INS)0.
The INS indicates that this decline is “unprecedented” for the country. Its growth rate has declined compared to the same period in 2019, by 2.1% in the first quarter of 2020, 21.3% in the second, 5.7% in the third and 6.1% in the fourth. This is after revision of the growth rates already published.
In 2019, the country’s GDP grew by 0.9% and by 2.9% in 2018.
In January 2021, following a team’s mission on site, the International Monetary Fund (IMF) predicted an 8.2% decline in GDP in 2020 which would lead to “increased poverty and unemployment”.
“The current account deficit is expected to have narrowed as a result of a sharp drop in demand for imports and transfers from Tunisians living abroad who remain dynamic, despite the shock to exports and the sharp drop in tourism receipts. The budget deficit is expected to be 11.5 per cent of GDP, mainly due to lower tax revenues, a higher wage bill, and additional transfers to public enterprises,” the IMF said in its report.
The IMF envisages a resumption of growth to 3.8 percent in 2021 on the assumption that the effects of the pandemic will be mitigated, while noting, “Nevertheless, the risks around this baseline projection are considerable, especially given the uncertainty about the duration and intensity of the pandemic and the uncertainty about vaccination.
The IMF calls on the Tunisian government to “assign a clear priority to health and social protection spending while exercising control over the wage bill, poorly targeted energy subsidies, and transfers to public enterprises. Without this vigilance, the projected budget deficit of 6.6 per cent of GDP in 2021 could increase by more than 9 per cent of GDP, IMF staff noted.
At the same time, the INS reveals that the unemployment rate will rise to 17.4% of the active population in the fourth quarter of 2020. The Institute indicates that the country now has 725,100 unemployed (compared to 676,600 in the third quarter of 2020 or 16.2%). “The unemployment rate has evolved in the same direction according to gender, increasing by 0.9 points to reach 14.4% for men and 2.1 points to reach 24.9% for women in the fourth quarter of 2020,” says the INS.
These figures come at a time when Tunisia is in the midst of a political crisis (dismissal of five ministers on Monday, February 15, 2021), health (223,549 registered cases of Covid-19 and 7,575 deaths) and economic crisis.
A glimmer of hope all the same with the launch, Monday, February 8, 2021 by the United Nations Conference on Trade and Development (UNCTAD), of a Productive Capacity Index (PCI) placing Tunisia at the forefront of countries in the southern Mediterranean. It measures the capacity of states to achieve their economic transformation.
With an overall KPI of 33.2, the country has excellent scores in the private sector (index of 83.8), human capital (56.8) and natural capital (58) categories. By comparison, in the region, Algeria has an overall KPI of 27.8, Libya 24.2, Egypt 29.4, and Morocco 30.5.