The Summer 2022 Edition of the World Bank’s Tunisia Economic Monitor “Navigating the Crisis during Uncertain Times” forecasts economic growth of 2.7% in 2022, slightly lower than previous World Bank estimates.
The report outlines how the war in Ukraine and rising international commodity prices exacerbated existing vulnerabilities of Tunisia’s economy in the first months of 2022. The impact of the war began to be felt as the trade deficit widened by 56 percent in the first six months of 2022, reaching 8.1%of GDP. Inflation rose from 6.7% in January 2022 to 8.1% in June 2022; and the budget deficit is forecast to reach 9.1% in 2022, compared to 7.4% in 2021.
The second chapter of the report stresses that replacing subsidized food prices with compensatory cash transfers to vulnerable households, would make the system more efficient, reduce fiscal and import costs, and strengthen food security in the face of future shocks. This reform is part of the Tunisian government’s announced program that includes several measures to support the economy and social inclusion.