Pending approval of a $1.9 billion financing program from the International Monetary Fund (IMF), Tunisia said it hoped to overcome a deepening economic crisis with the help of tourism and renewable energy revenues.
A fourth year of drought will reduce economic growth to 1%, against an initial forecast of 1.8%, Economy and Planning Minister Samir Saied told Bloomberg in Marrakech, Morocco, on Saturday. However, the country has managed to control inflation and the current account deficit, he added.
“After a series of global crises and shocks that had a considerable impact on our economy, we were faced with a fourth consecutive drought that hit the agricultural sector and wheat cultivation,” Saied said on the sidelines of the IMF and World Bank annual meetings.
“Fortunately, tourism and remittances from Tunisian expatriates have done well,” he added, forecasting that the current account deficit will stand at 4.3% of gross domestic product in 2023, compared with 8.6% estimated by the IMF for 2022.
Economic output should rise by 2.1% in 2024, thanks to tourism and export earnings from renewable energies. Inflation is expected to remain on a downward trend throughout 2024 and could fall to 8% or less, from 9.3% forecast for 2023, he said.
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Tourism revenues were up 43% year-on-year in the first nine months of this year. “They really helped boost our foreign currency reserves to 121 days of import requirements,” said Saied.
The renewable energy effort will initially focus on a project to link the Tunisian power grid to that of Italy, scheduled for completion in 2027. Tunisia aims to increase its green energy production to 35%, compared with just 3% at present.