TUNISIA

RB: Further delays to a $1.9 billion IMF programme seem increasingly likely due to concerns over the deteriorating state of Tunisia’s finances. The bailout is urgently needed to stave off a sovereign debt default. However, social discontent stemming from the ongoing deterioration in living conditions and labour unions’ ongoing objections to IMFrequested reforms is already high and will likely intensify as negotiations with the Fund progress. This will, in turn, elevate the risk of protests and strikes, though unrest is not expected to derail government policy.

President Kaies Saied is likely to proceed with implementing economic measures in line with the IMF’s recommendations. These would focus on reducing subsidies and trimming the public sector wage bill. The initiatives fall under the exclusive authority of the presidency and thus could not be blocked even by parliament. Nonetheless, ongoing unrest, corruption and bureaucratic inefficiency are expected to remain a hindrance to foreign operators investing in local projects.

JM: Tunisia has the potential to be a significant exporter due to its infrastructure and location. Its primary exports include electronics, clothing, and mineral fuels. As a manufacturing outsourcing alternative to Asia, Tunisia’s largest buyers of clothing are France, Germany, Italy, the UK, and Belgium.

Italy, France, China, Germany, and Turkey are Tunisia’s top import suppliers, sending in electronics, oil and gas, machinery, vehicles, and pharmaceutical products. Tunisia’s car market is among the world’s most diverse, with Germany, China, Mexico, Japan, and the US each sending it over $100 million worth of vehicles. In 2022, Tunisia’s total exports increased to $20.6 billion from $17.8 billion, with the top markets being France, Italy, Germany, Spain, and the US. Total imports rose from $21.7 billion to $22.8 billion, with Italy, France, China, Germany, and Turkey being the primary sources.