Tunisia- Tunisia has witnessed the appointment of 3 prime ministers since President Kais Saied announced exceptional measures on July 25, 2021 as part of an attempt to improve the economic and social situation. However, these changes have not achieved tangible results due to the absence of policies that address the structural problems that the country suffers from, according to observers.
Although the current government led by Kamal Al-Madouri considers 2025 to be a pivotal year for achieving economic, financial and social stability and creating a development dynamism that ensures the restoration of confidence in the economy’s ability to recover, economists believe that the recovery stage is far-fetched in light of current policies.
The authority’s political discourse is based on raising the slogan of strengthening the state’s social role and self-reliance without resorting to the International Monetary Fund, while observers believe that these are merely political slogans that do not find an actual translation on the ground, and that the economic policies applied are contradictory to the objectives of the authority.
Experts attribute what they consider a failure in economic policies to the continuous rise in prices, which has eroded the purchasing power of Tunisians as well as the deterioration of public utility services such as transportation, health, and education. They also point to weak economic growth and the stability of unemployment rates at high levels.
Economic situation
The government targeted growth of about 2.1% last year, but it was not achieved. Economist Reda Al-Shakandali told Al Jazeera Net that the government will review its estimates because they were unrealistic, noting that the World Bank’s expectations for the growth rate for the past year were approximately 1.2%.
Al-Shakandali believes that the economic and financial situation in Tunisia is very bad, highlighting that government policies are adopting austerity measures such as reducing supplies and steadily reducing dependence on external financing due to the absence of any agreement with the International Monetary Fund, which has led to an increase in the pace of internal borrowing, which has reduced Private investment financing.
Banks prefer to lend to the government over the private sector to avoid risk in such cases.
Analysts attribute Tunisia’s weak economic performance to structural weaknesses. The country’s productive structure is stuck in low value-added activities, and its companies are witnessing a recession exacerbated by the increase in taxes.
Strategic sectors such as phosphate are witnessing stagnation, with production declining to record levels due to labor protests, poor governance, and the absence of development projects.
Economist Al-Shakandali rules out that Tunisia will achieve a growth rate of 3.2% next year, as stated in the state budget estimates for the year 2025, considering them to be “imaginary” estimates. He believes that the policies currently implemented are incapable of resolving the situation and are also creating crises in the country.
Investment and business climate
Official financial reports show a noticeable decline in the level of domestic and foreign investment in Tunisia in recent years.
According to the report of the Central Bank of Tunisia, the percentage of domestic savings does not exceed 4.6% of the gross domestic product, which is an indicator of weak internal financing of the economy and investment.
Reda Al-Shakandali says that while other countries with economies similar to Tunisia are witnessing an investment rate estimated at about 25% of GDP, this percentage in Tunisia declines to less than 15%, adding that “this decline reflects weak investor confidence in the deteriorating business climate as a result of Administrative and other obstacles.
Curb inflation
The government approved a number of measures in the Finance Law of 2025, such as establishing a social protection fund for agricultural workers, in addition to a job loss insurance fund, creating financing lines for young entrepreneurs and supporting poor groups. It also approved tax measures to improve purchasing capabilities.
However, the Shkandali economist says that the weak support the government provided to the poor groups in terms of reducing taxes on the wages of the poor group will be taken away from the other hand due to the increase in the prices of many services, especially medical services, the price of which has recently increased.
It is expected that Tunisia will witness successive increases in the price of services in many sectors, such as private sector doctors, in the coming period, indicating that the inflation rate may reach 7% in 2024, which is a high rate that is not in line with the level of wages of most Tunisians.
The expert believes that the government is on the wrong path to address the inflation dilemma by increasing wages or increasing interest rates by the Central Bank of Tunisia, while the state should have improved the quality of services in transportation, health, and education so that citizens do not resort to expensive private sector services.
Formal discourse and practice
The official spokesman for the Tunisian Forum for Economic and Social Rights, Ramadan Ben Omar, told Al Jazeera Net that there is a contradiction between the slogans the government raises and what it practices on the ground, indicating that the government talks about achievements and measures while citizens only feel the deterioration of conditions and services.
He explains that the government is talking about strengthening the state’s social role, while citizens suffer from high prices as a result of their resorting to private sector services, whether in transportation, health, or education, due to the deterioration of public utility services, adding: “The citizen feels in his daily life the decline in his purchasing power and the deterioration of services.” .
He believes that the discourse of the current political authority contains a stark contradiction between what it promotes to public opinion about giving priority to social justice, achieving happiness and well-being, and developing public services, and what Tunisians observe in their daily lives of policies that burden them with taxes, high prices, and scarcity of basic materials.
Ramadan Ben Omar does not rule out the exacerbation of social protests in the coming period, with some social actors emerging from a state of hesitation and fear, such as the deputy professors (teachers), whose demand to settle their fragile situation was legally met after they decided to protest and stop lessons upon returning from winter vacation.
As for the economic expert, Reda Al-Shakandali, he says that the political authority in Tunisia raises the slogan of self-reliance without resorting to negotiations with the IMF, while the government is pursuing an austerity policy and working to reduce wages, which are measures that the Fund has long requested of the government.
He explains that steadily reducing reliance on external financing due to the absence of any agreement with the International Monetary Fund led to an increase in the pace of internal borrowing, whether from the Central Bank of Tunisia or local banks, which caused difficulty for economic institutions to access financing to create investment and employment.
