Country Economic Forecasts > Tunisia

We have kept our GDP growth forecast for 2016 at 1.2% due to continued contraction in the agricultural sector and weak industrial activity. And growth is forecast to remain lacklustre at about 2% in 2017, weighed down by fiscal pressures, weak domestic demand and an adverse external environment. Inflation is expected to average 3.7% this year before rising to 4.7% in 2017 reflecting a depreciating dinar and rising public sector wages. But this is still low in an African context and will provide some support for consumption. The external deficit remains high, rising to over 9% of GDP this year due to low tourism revenues, weak capital inflows and a decline in merchandise exports. The fiscal deficit has also risen (to over 5% of GDP) as a result of an increase in recurrent spending. We expect wages to rise further in 2017, albeit at a significantly slower rate than this year, meaning that there is less room for an increase in capital expenditure.