אירופה
ארצות הברית
לוב
שוויץ
אלג'ריה
סין
רוסיה (הפדרציה הרוסית)
ברזילAgriculture and tourism providing support, industry under pressure
The modest recovery seen in 2025 is expected to continue in 2026. Agriculture (10% of GDP) – particularly cereals and olive oil – is benefiting from favourable weather conditions, and construction activity is picking up. Nevertheless, agriculture remains vulnerable to drought, despite the opening of three new seawater desalination plants. Services (70% of GDP) are showing sustained growth, driven by the dynamism of tourism and related activities. Foreign visitor arrivals rose by 10.3% year-on-year at the end of November 2025 compared to the same period in 2024. However, growth could be slowed by the national airline Tunisair, which is in a fragile financial position and will not be able to increase its capacity sufficiently. The manufacturing sector (16%), which includes clothing and mechanical and electrical components for the automotive industry, is battling sluggish European demand and competition. Efforts to develop more promising sophisticated segments, such as aeronautics, medical and pharmaceuticals, are hampered by the reluctance of foreign investors, who are put off by political and social instability and high tax pressure (taxes = 34% of GDP). The extractive industries, particularly hydrocarbons and phosphates, are weakened by strikes and absenteeism. The agro-industry stands out for its dynamism. The authorities are seeking to attract FDI through public-private partnerships in the transport, water, waste management and energy sectors, but these remain insufficient to support industrial transformation.
As with foreign investment, domestic investment is hampered by political and social instability. In addition, investment faces high tax pressure, with taxes accounting for more than a third of GDP, as well as bank frugality, with the government capturing a significant share of credit. However, once the repayment on its last Eurobond is made in July 2026, the situation could improve on the latter point. Public investment will be restricted by the difficult budgetary situation, with revenues being absorbed by wages, debt servicing and costly subsidies.
With high unemployment (15%), particularly among young people and women, household consumption is growing moderately. Admittedly, inflationary pressures are being eased by lower global food and energy prices, as well as less severe import restrictions. This led the central bank to adjust its key interest rate in December 2025, reducing it from 7.5% to 7%. However, the monetisation of the budget deficit continues to fuel tensions. Despite price controls and exchange rate stability, food inflation persists, weighing heavily on many low-income households.
Precarious public and external accounts
Strong pressure on public finances will continue in 2026. The budget deficit could widen slightly, fuelled by rigid expenditure: nearly 93% of tax revenues are absorbed by the wage bill, debt interest and subsidies. The government maintains administered prices for electricity and gas, well below actual costs. For example, the Tunisian Electricity and Gas Company (STEG) charges electricity rates that cover only 40 to 60% of costs. This underpricing forces the government to compensate for the difference through subsidies. In addition, public enterprises contribute directly to this imbalance through their losses, combined with subsidies, debt deferrals and guarantees provided by the government. They account for 22.1% of the total public deficit. However, the authorities have introduced measures to increase revenue in 2026, such as the introduction of a tax on real estate and personal property (between 0.5% and 1%), but these adjustments will remain insufficient to reverse the trend.
Faced with closed access to markets and the frugality of international partners, the authorities are increasingly relying on domestic sources to finance the budget deficit. This includes foreign currency loans from the central bank used in 2024 and 2025 to repay external debt. This practice is expected to continue in 2026 to honour the final Eurobond repayment of EUR 750 million in July. In total, the government has already borrowed USD 2.3 billion (interest-free and repayable over 15 years) for 2024-2025 and plans to increase this amount to USD 3.8 billion in 2026. The central bank is now the main lender, at a level representing around 4% of GDP, ahead of domestic commercial banks, which are themselves heavily exposed to loss-making public companies. The banking system is therefore highly exposed to sovereign risk. The government's financing requirement is estimated at 15% of GDP: 10% for debt servicing (5% external, 5% domestic), in addition to the deficit.
The current account deficit could also widen slightly in 2026 due to the worsening trade deficit (9% of GDP). Despite the fall in energy prices, the deficit will widen as a result of higher imports on back of a recovery in domestic demand and some new external financing. Conversely, exports will remain sluggish, hampered by weak European demand, internal constraints (strikes, lack of financing, stagnation in the phosphate sector) and US customs duties (25%). This deterioration will be partially offset by moderate growth in tourism revenues (5% of GDP) and expatriate remittances (6% of GDP). Meagre foreign direct investment, as well as the few multilateral and bilateral funds aimed at containing migration and financing infrastructure, will not be enough to fully finance the deficit. Foreign exchange reserves (3.4 months of imports at the end of 2025) will have to be used to bolster the economy.
Presidentialism versus improved living conditions: will the deal be respected?
In 2022, a new constitution adopted by referendum established a strong presidential system, weakening legislative power and establishing presidential control over the government, security forces and the judiciary. Despite low public support, as evidenced by low voter turnout (11% in the parliamentary elections at the end of 2023 and 28.8% in the presidential elections), Kaïs Saïed was re-elected president in October 2024 with 90.7% of the vote in an election marked by the repression of the opposition. Since then, the centralisation of power, the marginalisation of political parties and the repression of opposition figures have fuelled discontent. Strikes have been ongoing, led by the UGTT (Tunisian General Labour Union), which called for a general strike in January 2026. Despite this, the President continues to enjoy a certain amount of popular support. The demonstrations (still) attract relatively few people. However, a deal has been struck: strengthening presidential power in exchange for improved living conditions. Although the president is seeking to contain the protests through social spending, his authoritarian style and frequent government reshuffles are undermining administrative efficiency, and corruption prevails despite reforms.
In 2023, Kaïs Saïed rejected the programme proposed by the IMF (USD 1.9 billion), which included subsidy cuts and reform of state-owned enterprises, because he considered the social cost to be too high. However, Western and Gulf partners continue to provide limited financial support to contain sub-Saharan migration pressure, ensure adequate food supplies and finance infrastructure projects among other things. On the diplomatic front, Tunis aims to maintain a balanced foreign policy, preserving its ties with Europe and the US while strengthening its relations with Russia, China and regional powers such as Saudi Arabia, the United Arab Emirates, Turkey and, above all, Algeria, which is a key supplier of natural gas.
