Chakandali: “ improvement in trade deficit is not beneficial to economy for these reasons…” [Video]

Speaking to Tunisie Numérique,economist Rida Chakandali noted  that the improvement in the trade balance deficit is beneficial if it results from an improvement in the level of exports or a fall in imports of consumer goods. Nevertheless, in this case, it is the result of a reduction in the supply of raw materials and semi-manufactured materials, which are necessary for production.

Chakandali added that the Tunisian economy is interconnected with the international market, especially at the production level. Consequently, production cannot happen without the importation of raw materials and semi-manufactured materials. In light of the drop of these materials, the result is a reduction in production and economic contraction, which is what occurred at the start of this year by 0.2%.

Concerning the improvement in the industrial trade deficit by 44.91%, it is also due to a slide in imports of raw and semi-manufactured materials, as well as processing materials. Consequently, many sectors related to industrial and non-industrial industries experienced a drop in exports.

The economist clarified that the rate of decline in phosphate exports was 30%—that is, by a third. Further, the textiles, clothing, and leather sector, which is the most important export sector, witnessed its exports decline by 90%. This indicates that the improvement in the trade balance deficit was not beneficial to the economy, as he put it.