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Modern Central Bank of Tunisia building in Tunis.

Tunisia is in the process of economic reform and liberalization after decades of heavy state direction and participation in the economy. Prudent economic and fiscal planning have resulted in moderate but sustained growth for over a decade. Tunisia's economic growth historically has depended on oil, phosphates, agri-food products, car parts manufacturing, and tourism. In the World Economic Forum 2008/2009 Global Competitiveness Report, the country ranks first in Africa and 36th globally for economic competitiveness, well ahead of Portugal (43), Italy (49) and Greece (67).[1]

Contents

Historical trend

Current GDP per capita soared by 380% in the Seventies. But this proved unsustainable and it collapsed to a paltry 10% in the turbulent Eighties rising to a modest 36% in the Nineties signifying the impact of successful diversification.

This is a chart of trend of gross domestic product of Tunisiaestimated by the International Monetary Fund with figures in millions of Tunisian Dinars.

Year Gross Domestic Product (Constant Prices - Billions) US Dollar Exchange (PPP) Inflation Index
(2000=100)
Per Capita Income
(as % of USA)
1980 7.620 0.244 Tunisian Dinars 29 11.16
1985 9.358 0.305 Tunisian Dinars 46 6.59
1990 10.816 0.347 Tunisian Dinars 65 6.50
1995 13.074 0.401 Tunisian Dinars 85 7.36
2000 17.181 0.440 Tunisian Dinars 100 5.85
2005 21.372 0.437 Tunisian Dinars 114 6.89
2007 23.966 0.439 Tunisian Dinars 120

For purchasing power parity comparisons, the US Dollar is exchanged at 0.44 Tunisian Dinars only. Average wages in 2007 hover around $16-19 per day.

Growing foreign debt and the foreign exchange crisis in the mid-1980s. In 1986, the government launched a structural adjustment program to liberalize prices, reduce tariffs, and reorient Tunisia toward a market economy.

Olive grove inSfax, Tunisia

Tunisia's economic reform program has been lauded as a model by international financial institutions. The government has liberalized prices, reduced tariffs, lowered debt-service-to-exports and debt-to-GDP ratios, and extended the average maturity of its $10 billion foreign debt. Structural adjustment brought additional lending from the World Bank and other Western creditors. In 1990, Tunisia acceded to the General Agreement on Tariffs and Trade (GATT) and is a member of the World Trade Organization (WTO).

In 1996 Tunisia entered into an "Association Agreement" with the European Union (EU) which removes tariff and other trade barriers on most goods by 2008. In conjunction with the Association Agreement, the EU is assisting the Tunisian government's Mise A Niveau (upgrading) program to enhance the productivity of Tunisian businesses and prepare for competition in the global marketplace.

The government has totally or partially privatized around 160 state-owned enterprises since the privatization program was launched in 1987. Although the program is supported by the GATT, the government has had to move carefully to avoid mass firings. Unemployment continues to plague Tunisia's economy and is aggravated by a rapidly growing work force. An estimated 55% of the population is under the age of 25. Officially, 14% of the Tunisian work force is unemployed.

External trade and investment

Tunisian exports in 2006

In 1992, Tunisia re-entered the private international capital market for the first time in 6 years, securing a $10-million line of credit for balance-of-payments support. In January 2003 Standard & Poor's affirmed its investment grade credit ratings for Tunisia. The World Economic Forum 2002-03 ranked Tunisia 34th in the Global Competitiveness Index Ratings (two places behind South Africa, the continent's leader). In April 2002, Tunisia's first US dollar-denominated sovereign bond issue since 1997 raised $458 million, with maturity in 2012.

The Bourse de Tunis is under the control of the state-run Financial Market Council and lists over 50 companies. The government offers substantial tax incentives to encourage companies to join the exchange, and expansion is occurring.

The Tunisian government adopted a unified investment code in 1993 to attract foreign capital. More than 1,600 export-oriented joint venture firms operate in Tunisia to take advantage of relatively low labor costs and preferential access to nearby European markets. Economic links are closest with European countries, which dominate Tunisia's trade. Tunisia's currency, the dinar, is not traded outside Tunisia. However, partial convertibility exists for bonafide commercial and investment transaction. Certain restrictions still limit operations carried out by Tunisian residents.

The stock market capitalisation of listed companies in Tunisia was valued at $5.3 Billion in 2007, 15% of 2007 GDP, by the World Bank.[2]

For 2007 , foreign direct investment totaled TN Dinar 2 billion in 2007, or 5.18% of the total volume of investment in the country. This figure is up 35.7% from 2006 and includes 271 new foreign enterprises and the expansion of 222 others already based in the country.

The economic growth rate seen for 2007, at 6.3% is the highest achieved in a decade.

Economic data

GDP: purchasing power parity - $77.00 billion (2007 est.)

GDP - real growth rate: 6.3% (2007 est.)

GDP - per capita: purchasing power parity - $7,473 (2007 est.)

GDP - composition by sector:
agriculture: 11.6%
industry: 25.7%
services: 62.8% (2007 est.)

Population below poverty line: 7.4% (2005 est.)

Household income or consumption by percentage share:
lowest 10%: 2.3%
highest 10%: 31.5% (2000)

Inflation rate (consumer prices): 3.1% (2007 est.)

Labor force: 3.593 million (2007 est.)
note: shortage of skilled labor

Labor force - by occupation: services 55%, industry 23%, agriculture 22% (1995 est.)

Unemployment rate: 14.1% (2007 est.)

Budget:
revenues: $6.101 billion
expenditures: $6.855 billion, including capital expenditures of $1.6 billion (2003 est.)

Industries: Petroleum, mining (particularly phosphate and iron ore), tourism, textiles, footwear, agribusiness, beverages

Industrial production growth rate: 7.2% (2007 est.)

Electricity

  • Production: 12.85 Billion kWh (2005)
  • Production by source:
    • fossil fuel: 99.5%
    • hydro: 0.5%
    • nuclear: 0%
    • other: 0% (1998)
  • Consumption: 11.17 billion kWh (2005)
  • Exports: 0 kWh (2005)
  • Imports: 0 kWh (2005)

Agriculture

Agriculture - products: olives, grain, dairy products, tomatoes, citrus fruit, beef, sugar beets, dates, almonds,

Exports and imports

Exports: $15.15 billion f.o.b. (2007 est.)

  • Exports - commodities: textiles, mechanical goods, phosphates and chemicals, agricultural products, hydrocarbons
  • Exports - partners: France 30.7%, Italy 20.6%, Germany 8.4%, Spain 5.4%, Libya 5.1% (2006)

Imports: $18.03 billion f.o.b. (2007 est.)

  • Imports - commodities: machinery and equipment, hydrocarbons, chemicals, fuel, food
  • Imports - partners: France 24.1%, Italy 22.2%, Germany 9.8%, Spain 5.1% (2006)

Debt - external: $19.27 billion (December 2007)

Economic aid - recipient: $376.5 million (2003)

Currency

Currency: 1 Tunisian dinar (TD) = 1,000 millimes

Exchange rates: Tunisian dinars (TD) per US$1 - 1.2776 (2007), 1.331 (2006), 1.2974 (2005), 1.2455 (2004), 1.2885 (2003)

Fiscal year: calendar year

See also

External links

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