Confirming resilience of external sector: IMF predicts decline in current account deficit to 5.4% of GDP in 2024

By:Mohamed Ben Abderrazek

The current deficit, mirroring the pattern of the balance of payments, is expected to decrease for Tunisia from 5.8% of GDP in 2023 to 5.4% of GDP in 2024. This significant improvement follows a high of 8.6% of GDP in 2022, as indicated by the latest forecasts from the IMF’s October 2023 World Economic Outlook report.

Furthermore, the substantial reduction in the current account deficit was highlighted in the recent World Bank report on economic developments in the MENA zone. The international organization predicted a decline in Tunisia’s current account balance from -8.6% of GDP in 2022 to -4% in the current year, with a projection of -4.6% in 2024.

The IMF report also anticipates a modest increase in the national economy’s growth rate, with a 0.6% improvement between 2023 and 2024, reaching 1.9% by the end of this period. This figure contrasts with the 3% growth rate forecasted by the World Bank.

Moreover, the IMF asserts that emerging and developing countries are likely to experience a slight decline in their growth, from 4.1% in 2022 to 4.0% in 2023 and 2024. Global inflation is expected to steadily decrease, dropping from 8.7% in 2022 to 6.9% in 2023 and further to 5.8% in 2024. This decline is attributed to the tightening of monetary policies facilitated by a decrease in international commodity prices.

It is worth noting that inflation, excluding energy and food, is expected to decrease at a slower pace. Overall, in most countries, inflation is not projected to return to its target value before 2025, as specified in the report.