Tunisia is at a critical juncture in economic terms, the World Bank notes in its latest Economic Monitoring Note on Tunisia. The World Bank predicts growth of 2.6 % in 2013, 3.0 % in 2014 and 4.1 % in 2015, well below the country’s potential. To elevate Tunisia’s growth path and encourage job creation, Tunisia must undertake reforms to remove structural barriers that hinder the development of private investment.
While the transition process unfolds, political and security challenges that have marked 2013 also weighed on economic activity in Tunisia. Investment, exports and tourism have declined or at best stagnated during the year. The pace of economic expansion slowed considerably due to these unfavorable developments. Given the prospects of sluggish growth, unemployment is likely to remain at high levels in the near future.
In this context , more and more calls for ' austerity ' have been launched in recent months. Even if this is necessary, fiscal discipline alone does not stimulate economic growth or job creation , and may even act as a brake in the short term.
Faster growth will only be possible by developing an inclusive and competitive private sector - which requires faster and deeper reforms already underway, while redirecting public expenditures with the fiscal space still available.
Read the full report here (pdf - French).
* World Bank forecasts are frequently updated based on new information and changing (global) circumstances. Consequently, projections presented here, or in other reports, such as the Global Economic Prospects, may differ from those contained in other Bank documents.
