Tunisia Economic Monitor : Strengthening Social Safety Nets for Increased Efficiency and Equity - Fall 2025

Overview & Synopsis

Tunisia’s economy showed moderate recovery in 2025, with growth reaching 2.4 percent in the first nine months, driven by a rebound in agriculture, construction, and tourism, despite contractions in hydrocarbons and financial services. Inflation continued to decline, allowing cautious monetary easing, while external balances remained under pressure due to a widening trade deficit partially offset by resilient tourism receipts, remittances, and rising foreign direct investment. Fiscal consolidation advanced, yet public debt remains high, and financing constraints persist, with increasing reliance on domestic borrowing crowding out private sector credit. Despite recent job creation, labor market fragilities and gender disparities endure. Over the medium term, growth is expected to stabilize around 2.4 percent, constrained by subdued investment, structural bottlenecks, and limited external financing. Tunisia’s extensive social protection system—particularly the AMEN program—has contributed to reducing poverty and inequality, but faces challenges related to targeting, institutional capacity, and long-term financial sustainability. Strengthening governance, expanding economic inclusion measures, and advancing structural reforms will be essential to support a more resilient, efficient, and inclusive development trajectory.