Tunisia Economic Structure
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Tunisia’s economic structure greatly depends on the country’s fiscal and monetary policies, which have secured macroeconomic stability and investor confidence.
Tunisia’s fiscal deficit increased to 3 percent in 2008, from 2.8 percent in 2007. The fiscal deficit, which was 3.2 percent in 2009, is expected to rise marginally to 3.3 percent in 2010. Although there has been a decline in oil prices in 2009, the government raised the subsidies on basic consumer goods and fuels. These subsidies are expected to continue in 2010.
Tunisia’s economic structure greatly depends on the country’s fiscal and monetary policies, which have secured macroeconomic stability and investor confidence.
Tunisia’s fiscal deficit increased to 3 percent in 2008, from 2.8 percent in 2007. The fiscal deficit, which was 3.2 percent in 2009, is expected to rise marginally to 3.3 percent in 2010. Although there has been a decline in oil prices in 2009, the government raised the subsidies on basic consumer goods and fuels. These subsidies are expected to continue in 2010.
Bridging the gap for lost revenue, Tunisia authorities are planning to broaden the base and lower the rate of company tax, simplify value added tax (VAT) and review the tax incentives granted to priority and offshore activities.
Public debt ratio fell from 53.7 percent of GDP in 2006 to 45.1 percent in 2008. In 2010, the ratio stood at 24.3 percent of the GDP. The proportion of the debt exposed to exchange rate and refinancing risk has been considerably reduced in recent years due to efficient fiscal management.
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Economic Geography
Tunisia is located in Northern Africa, bordering the Mediterranean Sea, between Algeria and Libya. The country has a mountainous (in the north), hot and dry central plain and semiarid (in the south that merges into the Sahara) terrain with a temperate climate in the north and desert climate in the south. The country has a unique demographic running along the Atlas mountain range, on the Saharan Desert, and partly along 8,000 miles of coastline.
Tunisia’s natural resources include petroleum, phosphates, iron ore, lead, zinc and salt.
Population & Labor Force
Tunisia’s population in 2010 was 10.544 million living in an area covering 103,000 square miles. The population is expected to grow to 11.108 million by 2015.
As at 2010, Tunisia’s unemployment rate was 13.2 percent, however its expected to decline to 12.9 percent by 2015.
Industry Sectors
Tunisia’s industry sectors depend mainly on the country’s industrial sector. The country has one of the most developed education systems in Northern Africa.
Although Tunisia lacks the volume of oil production compared to Algeria and Libya, Tunisia has sizeable deposits of natural gas that helps limit its dependence on energy imports. Tunisia has traditionally been a hub of trade between Africa and Europe for more than 2,000 years.
Latest statistics for Tunisia in 2010 indicate 10.8 percent of the labor force is employed in agriculture, 28.3 percent in industry and 61 percent in services.
Tunisia Economic Structure: Monetary Policy
Rising world prices of oil and commodities drove Tunisia’s consumer price index inflation from 3.1 percent in 2007 to 5 percent in 2008. In response, the Central Bank raised the level of reserves from 3.5 percent to 5 percent in November 2007 to 7.5 percent in April 2008.
In January 2009, the Bank eased the mandatory reserve requirement to improve the liquidity of all banks in Tunisia. The rate of inflation then fell to 2.9 percent in 2009, and is expected to rise to 3.1 percent in 2010.
In addition, the depreciation of the Tunisian currency has made exports more competitive. Between December 2007 and December 2008 the dinar depreciated by 3.6 percent against the euro, but appreciated by nearly 11 percent against the US dollar.
