World Bank Cuts Forecast for Tunisia's Economic Growth to 2.2% in 2020
Tunisia's Gross Domestic Product (GDP) growth will reach 2.2 percent in 2020, according to new World Bank (WB) forecasts.
These rates will be achieved thanks, in particular, to political reforms and the resilience of tourism, the international financial institution said in a recent report.
The Bank linked growth in its January 2020 Global Economic Prospects to global and regional facts. It said global economic growth is forecast to edge up to 2.5 percent in 2020, amid mounting debt and slowing productivity growth.
However, it believes the fragility of the banking sector and high indebtedness severely hamper growth in small oil-importing countries, such as Tunisia.
In previous reports, the bank had predicted that the economy will grow at a faster rate than in the past. Tunisia's GDP growth rate was expected to be 3.4 percent in 2020 and 3.6 percent in 2021 but it stood at 2.7 percent in 2019.
The WB sought in its new report to review these ratios in light of the economic difficulties facing the local economy.
The growth rate of Tunisia’s economy had declined remarkably during 2019, as it did not exceed the limits of one percent, a figure completely contrary to the optimistic forecasts presented by the Ministry of Finance, estimated at three percent at the end of 2018.
In this regard, Tunisian economic expert Jannat bin Abdullah stressed the need to review a number of economic indicators and adapt them to the reality of the economy through its performance during the last period.
She pointed to the difficulties that hindered what previous governments called “economic takeoff.”
These include an increased imbalance of the structure of domestic financial budgets, a decline in economic performance in general, and fluctuation of the results achieved by the most vital engines of the country’s economy, especially exports and investment in foreign and domestic firms.
In other news, Tunisia’s trade deficit hit a record level of DT19.4 ($6.9 billion) throughout 2019, according to figures made public by the National Institute of Statistics (INS).
Tunisia recorded a deficit particularly with China, Algeria, Italy, Turkey, and Russia.
The energy and fuel sectors contributed to 40 percent of the total deficit in 2019, compared to 32 percent in 2018 and 26 percent in 2017.
In spite of the increased trade deficit, the ratio of import coverage to exports recorded an improvement, amounting to 69.3 percent compared to 68.3 percent in 2018.