Tunisia

Tunisia is a lower-middle-income country with a population of approximately 12 million as of 2024. It is in North Africa along the Mediterranean Sea, sharing borders with Algeria to the west and Libya to the southeast. The official language is Arabic, while French is widely used in business and administrative contexts.

Key economic sectors in Tunisia include agriculture — which produces olives, dates, cereals, and citrus fruits — component manufacturing, retail, and tourism, supported by the Mediterranean coastline and the country's rich historical heritage.

Since the sharp contraction of the economy due to COVID-19 in 2020, Tunisia's growth has remained moderate. Following a rebound in 2021 (4.7 percent) and 2022 (2.8 percent), real growth stagnated at 0.2 percent in 2023, with a slight recovery to 1.6 percent in 2024. Drought, global financing uncertainties, and subdued demand have influenced the recovery. In 2025, GDP grew by 2.5 percent, driven by an agricultural recovery, increased activity in the components industry, and private consumption growth.

On the external front, Tunisia faced mixed developments in 2025. Tourism revenues increased by 5.3 percent, and remittances rose by 14.9 percent, while the merchandise trade deficit widened by 13.4 percent. On balance, the current account deficit expanded from 1.5 percent to 2.4 percent of GDP.

The fiscal deficit moderated to 5.2 percent of GDP in 2025, down from 6.1 percent in 2024, compared to 2.9 percent in 2019. Public debt declined from 84.9 percent of GDP in 2024 to an estimated 82.2 percent in 2025, against a pre-COVID level of 67.8 percent in 2019.

Net Foreign Direct Investment (FDI) reached 1.4 percent of GDP in 2024 and is estimated at 1.6 percent in 2025. Authorities increasingly drew on domestic sources to meet financing needs, including repeated foreign-exchange borrowing from the Central Bank, which covered about a quarter of 2024's financing requirements.

Inflation has moderated, decreasing from 10.4 percent in February 2023 to 5.7 percent on average in 2025, aided by easing global prices, lower demand, and a policy interest rate maintained at 8 percent throughout the year before being reduced to 7 percent in December 2025.

The unemployment rate stood at 15.2 percent in Q4 2025 (down from 16.5 percent in Q4 2024), while labor force participation reached 45.9 percent, remaining below pre-COVID levels.

Tunisia's development potential is bolstered by its strategic location, skilled workforce, solid infrastructure, and abundant natural resources. At the same time, structural constraints continue to limit economic transformation and efficient resource mobilization. The state plays a significant role through public policies, an investment-friendly institutional framework, and prudent fiscal management, all of which aim to promote sustainable and inclusive growth.

As of 2021, the national poverty rate stood at 16.6%, with a higher rate of 24.8% in rural areas compared to 12.7% in urban centers. Unemployment affected 15.3% of the labor force, with youth (ages 15–24) facing a staggering rate of 36.8% and women experiencing a rate of 20.9%. The Northwest and Center-West regions reported the highest levels of poverty.

The Country Partnership Framework (CPF) for Tunisia for FY2023–2027 outlines the World Bank's strategy in the country, which was established in June 2023. This CPF aligns with Tunisia's national and sectoral strategies. Guided by the Systematic Country Diagnostic (SCD) and the Country Climate and Development Report (CCDR), the CPF aims to facilitate a transition to faster and more inclusive growth in Tunisia through three key objectives: Creating quality jobs in the private sector, strengthening human capital, enhancing climate resilience, and reducing carbon emissions.

The World Bank is assisting the Tunisian government in advancing these goals through various energy, water, human capital, and connectivity programs. Additionally, the CPF seeks to incorporate two cross-cutting themes—gender and social accountability, participation, and trust—across all its programs. Beyond lending, the CPF presents an ambitious agenda for advisory work and technical assistance.

Tunisia Country Partnership Framework for the period FY2023 - FY2027

The Climate Change Development Report (CCDR), which was launched in November 2023, offers a comprehensive set of measures to address significant climate challenges such as water scarcity, rising sea levels, flooding, and dependence on fossil fuel imports. This report aligns with national climate transition strategies and aims to mitigate climate impacts while promoting economic recovery and creating job opportunities. It provides actionable recommendations for both adaptation and decarbonization.

Tunisia Country Climate and Development Report

The World Bank supports Tunisia’s renewable energy, human capital, social protection, water, and connectivity:

• $268 million finances the Tunisia–Italy electricity interconnector, a 600 MW cable linking Tunisia’s grid to Europe, co-financed by Italy, the European Union, the European Bank for Reconstruction and Development, the European Investment Bank, and KfW, with $25 million concessional from the Green Climate Fund via the Sustainable Renewables Risk Mitigation Initiative.
• The Irrigated Agriculture Intensification Project (PIAIT) is upgrading irrigation and drainage for 10,000 beneficiaries across 24,000 hectares.

• The Tertiary Education for Employability Project (PromESsE) improved employability and management for 22,000+ students and introduced performance-based funding in five public universities; the follow-on Strengthening Tertiary Education for Employability, Innovation and Resilience (RESPIRE) will further strengthen quality and governance.
• The Strengthening Foundations for Learning Project (PREFAT) is expanding access by building 91 preschool classrooms and rehabilitating 70+ primary schools, benefiting 700,000+ students.
• The AMEN Social Program has reached 370,000+ vulnerable households with cash transfers and 620,000+ low-income households with free or subsidized healthcare, expanded during COVID-19, and now provides family allowances for 150,000+ children, digitized transfers and a social ID support delivery.
• The Emergency Food Security Response helped Tunisia cope with drought and Ukraine-related shocks, enabling purchases of 701,000 tons of wheat and 237,000 tons of barley and supporting small producers.
• Since 2020, $120+ million in health support has provided protective equipment, medical oxygen to 118 public facilities, 6+ million vaccine doses, and the eVax platform.
• With the French Development Agency, the Tunisia Integrated Disaster Resilience Program (ResCat) has protected ~65,000 people from flooding and piloted early-warning systems.
• The Innovative Startups and Small and Medium-Sized Enterprises Project is strengthening the entrepreneurship ecosystem: the Anava fund of funds invested $30 million in four funds (raising $67 million) and made 11 startup investments; the $17 million InnovaTech co-investment fund has seven investments, together mobilizing $37 million in private finance.