Economic growth is projected to pick up. The implementation of the new law on investment should boost investment, and exports should benefit from the recovery in the EU and the lower dinar. Unemployment will fall, but will still remain high. The current account deteriorated sharply in early 2017 and only a slight recovery is projected in 2018 and 2019.
Inflation has been rising since the beginning of 2017 and the central bank has twice raised its key interest rate this year. The budget deficit for 2017 is likely to be higher than expected and public debt will continue to grow. Greater and more equitable revenues, combined with an effort to rein in operating costs, would help to control the deficit.
External debt has climbed steeply since 2011 to reach 70% of GDP, making it sensitive to any significant depreciation of the dinar. It will increase rapidly with a projected current account deficit of 10% of GDP. Consumer credit doubled between 2010 and 2016. The proportion of non-performing loans in total credit is high, especially in public banks, which constrains lending and prevents its efficient allocation.