Tunisia aims to weather a deepening economic crisis by leveraging revenues from both its tourism and renewable energy sectors, Economy and Planning Minister Samir Saied told journalists on the sidelines of the annual IMF and World Bank meetings in Marrakech, Morocco.
According to the minister, the country's economic growth is expected to backtrack by 1% due to a fourth consecutive year of drought, compared to the initial prediction of 1.8%. Nonetheless, Tunisia has still been able to curb inflation and keep the current account deficit under control, he noted.
"After a series of global crises and shocks that have had a great impact on our economy, we were confronted with a fourth consecutive drought that hit the agriculture sector and wheat farming," Saied told media, adding: "Thankfully, tourism and transfers by Tunisia expatriates have been doing well."
He projected that the current account deficit would decrease to 4.3% of GDP in 2023, in contrast to the IMF's estimation of 8.6% for 2022.
Moreover, economic output is projected to climb by 2.1% in 2024, with the help of tourism and export earnings from renewable energy sources. Inflation is expected to continue to decline throughout 2024 and can potentially fall to 8% or lower, compared to the projected 9.3% for 2023, Saied added.
The media reported that the nation's initiative toward renewable energy is currently centered on a plan to link Tunisia's electric grid with Italy's, set to be finished in 2027. Tunisia intends to raise its current green energy output of 3% to 35%.
Although Tunisia has signed a $1.9 billion IMF program, it has not yet received the final green light from the lender's board. The IMF is seeking extensive economic changes, including cost-cutting measures that Tunisia deems unfeasible.
Bailout talks between the international lender and Tunisia have been stuck in the mud for months, with the United States and France, in particular, demanding far-reaching reforms from President Kais Said. However, the leader disagrees with the conditions under which the global monetary institution is offering financial aid.
In April, the president lashed out at the terms of the bailout package, which among other things include cuts to food and energy subsidies and a reduction in the public wage bill. Noting that the subsidy cuts could lead to social unrest, Saied stressed that he would not accept "diktats."
The nation's economy has experienced a significant downturn, with living standards of its 12 million citizens worsening over the recent years. The situation was exacerbated by political discord following the Arab Spring protests and, more recently, by surging food prices due to the conflict in Ukraine.