Definition: This entry briefly describes the type of economy, including the degree of market orientation, the level of economic development, the most important natural resources, and the unique areas of specialization. These grievances contributed to the January 2011 overthrow of BEN ALI, further depressing Tunisia's economy as tourism and investment declined sharply. The total value of exports and imports of goods and services equals 99.5 percent of GDP. Key exports now include textiles and apparel, food products, petroleum products, chemicals, and phosphates, with about 80% of exports bound for Tunisia's main economic partner, the EU. While the 2011 constitution calls for a robust and independent judiciary, judicial reform has proceeded slowly. This increase has been financed primarily by external borrowing. Levels of youth unemployment are high, and strikes in the phosphate sector indicate a certain level of labor unrest. Public spending needs prioritizing and better targeting to spearhead the economy. High levels of corruption and a large backlog of property disputes hamper the protection of property rights. $1.0 billion Tunisia's strategy, coupled with investments in education and infrastructure, fueled decades of 4-5% annual GDP growth and improved living standards. The weak financial sector remains fragmented and dominated by the state. In 2019, unemployment remained high among college graduates, with large differences between coastal and interior regions. The constitution of 1959 granted the … The average applied tariff rate is 9.3 percent, and nontariff barriers further raise the cost of trade. Recent business reforms have included combining different registrations for starting a business and improving protections for minority investors. Unemployment among people ages 15 to 24 is 34.3%. Key exports include textiles and apparel, food products, petroleum products, chemicals, and phosphates, with about 80 percent of exports bound for Tunisia’s principal trading partner, the European Union. Zine al-Abidine Ben Ali in 2011, the Tunisian political system featured a powerful presidential regime backed by a single political party. Tunisia Economic Growth The economy is set to shrink significantly this year as the domestic economy falters on lower household and capital spending. Despite the central bank policy of raising interest rates since 2017, inflation remained at 7.1% in 2019—and is projected to moderate to 6.7% in 2020 and 6.1% in 2021. The Tunisian economy has been in the ranks of the mostly unfree for more than a decade, belying the hopes of the 2011 Arab Spring for greater liberalization. © 2020 by The Heritage Foundation. The fiscal deficit improved slightly to 3.9% in 2019, from 4.6% in 2018. Government spending has amounted to 30.0 percent of the country’s output (GDP) over the past three years, and budget deficits have averaged 5.6 percent of GDP. Tunisia is a founding member of the World Trade Organization (WTO) and is publicly committed to a free trade regime and export-led growth. Tunisia’s economy became less and less inclusive. Tunisia’s government remains under pressure to boost economic growth quickly to mitigate chronic socio-economic challenges, especially high levels of youth unemployment, which has persisted since the 2011 revolution. 15.5% Inflation (CPI): The tourism industry (beach, business, mountain, oasis, eco-tourism, and seawater therapy) was until 2011 a significant source of growth and employment. Tunisia was the birthplace of the Arab Spring protests, which in 2011 ousted longtime President Zine al-Abidine Ben Ali. The fiscal deficit improved slightly to 3.9% in 2019, from 4.6% in 2018. Routine procedures for doing business (customs, transportation, and some bureaucratic paperwork) involve corrupt practices. Real GDP growth should recover to 2.1% in 2020 and 2.6% in 2021, spurred on the supply side by agriculture, phosphates, and tourism sectors. A sharp reduction in tourism revenues and subdued foreign demand will weigh heavily on the external sector, although an uptick in government spending should soften the downturn slightly. Despite efforts to attract more foreign investment, growth in long-term investment has been inhibited by bureaucracy and political uncertainty. The government faces pressure from foreign lenders to reduce public spending, including subsidies on food and fuel, but cuts will be politically sensitive. $144.2 billion Unemployment was 15.3% during the first quarter of 2019 but has dropped slightly as the decline in unemployment among graduates continued. Tunisia's economy – structurally designed to favor vested interests – faced an array of challenges exposed by the 2008 global financial crisis that helped precipitate the 2011 Arab Spring revolution. Home | Country Rankings | Graph The Data | Heat MapExplore the Data | Downloads | FAQs| About The Index. Read more about Tunisia Economy.