Tunisians are facing the worst crisis in a generation, as COVID-19 hit an economy that was already slowing down. Macroeconomic policy through ﬁscal stimulus and monetary easing limited the depth and severity of the recession, but the pandemic has exacerbated structural weaknesses, in particular low investment and job creation, high unemployment and informality, mismatch between skills demand and supply, and outward migration of high-skilled professionals.
Following a sharp 8.8% decline in 2020, GDP is projected to grow by around 3% a year until 2023. A third COVID-19 wave and tighter containment measures during the summer penalised labour-intensive services such as tourism, and high unemployment is damping private consumption. Investor confidence remains subdued due to political uncertainty, difficulties in financing the large fiscal deficit and little progress on structural reforms. However, the recovery in Tunisia’s main trading partners will boost merchandise exports, and tourism will rebound as vaccinations become widely deployed domestically.