Tunisia’s Economic Outlook for 2024: Slow Growth, Renewable Energy Investments, and Tax Reforms

Tunisia’s economy showed limited growth in the first half of 2024, with a 0.6% increase. While some sectors like agriculture show improvement, others such as oil and gas continue to face challenges. The World Bank’s report predicts 1.2% growth for 2024, urging greater investment to boost growth and foster competition. Renewable energy has become a key investment area, with the government aiming to significantly expand its solar energy capacity by 2026.

Despite ongoing economic challenges, Tunisia has improved its external balance, reducing its current account deficit. A combination of lower energy import prices and a rise in olive oil exports has helped in this effort. Inflation has also dropped, reaching 6.7% by September 2024, although food inflation remains a concern. However, the country faces rising domestic debt, which could pose risks to economic stability and currency value.

The report also highlights the need to reform Tunisia’s tax system for greater fairness. It stresses the importance of balancing labor and capital taxation to prevent discouraging employment and increasing informality. The government has already taken steps, such as introducing an annual property tax and raising fuel taxes in 2023. Moving forward, the World Bank recommends further changes to strengthen Tunisia’s tax system and ensure a more equitable and sustainable economic framework.