According to the U.S. International Trade Commission, in 2022 Tunisia was the United States’ 96th largest goods export market and 90th largest goods import market. Bilateral trade in goods totaled $1.3 billion, with U.S. exports to Tunisia totaling $552 million. Top U.S. export categories were agricultural products, chemicals, fabricated metal products, machinery, and transportation equipment. Major imports from Tunisia included apparel, food products (mainly olive oil and dates), electronics, and electrical components.
Tunisia has a diverse market economy. In 2022, Tunisia’s economy continued to be heavily impacted by Russia’s invasion of Ukraine. Tunisia has also recovered slowly following the COVID-19 pandemic, which saw a record 8.8 percent contraction in 2020. According to the National Institute of Statistics (INS), GDP growth slowed to 2.4 percent in 2022, from 3.1 percent in 2021. Economic challenges continued in 2023 as the country confronts high levels of unemployment and inflation, rising levels of public debt, and shortages of food products, medicines, and energy commodities. Real GDP in the first half of 2023 increased by 1.2% compared to the same period in 2022. In August 2023, the INS forecast year-on-year GDP growth will only reach 1.9% in 2023. Unemployment, which reached 14.9% prior to the pandemic, reached 15.6% in Q2 2023, with even higher rates reported among youth, women, and recent college graduates. The Government of Tunisia (GOT) is focused on bolstering export sectors, attracting foreign investment, and increasing tourism. In 2022, about 70% of Tunisian exports went to the European Union.
According to the INS, total exports in the first six months of 2023 increased 10% compared to the same period in 2022, mainly attributed to increases in exports of mechanical and electrical components (+18.6%), textiles and apparel (+13.7%), and agro-food products (+9.3%).
Tunisia’s total imports in the first six months of 2023 decreased by 0.6% compared to the same period in 2022, with notable decreases of raw materials and semi-finished products (-4.2%) and energy (-0.9%).
In September 2016, to encourage good governance of investment, the Tunisian Parliament passed Investment Law (#2016-71), which went into force April 1, 2017. The law provided for the creation of three major institutions: The High Investment Council; the Tunisian Investment Authority; and the Tunisian Investment Fund. These institutions were launched in February 2018. In May 2018, the government adopted decree #2018-417, which listed sectors that need prior government authorization for investment, also known as “the negative list.” In June 2021, the government announced the elimination of government authorization requirements for 27 business activities in various sectors, about 10% of the total authorization categories. The change allows foreign and local investors to open businesses under conditions detailed in books of specifications without waiting for a government license. The action is meant to revive an economy heavily impacted by the COVID-19 pandemic and boost investment in sectors such as tourism, transportation, finance, and renewable energy. For example, government authorizations are no longer required for business ventures such as the opening of shopping malls and supermarkets, operation of certain aircraft for tourism and leisure activities, management of financial portfolios by non-resident companies, organization of sporting events, cement manufacturing, self-production of electricity from renewable energies under one megawatt, import and marketing of films, sale and distribution of tobacco and alcohol, and import of used clothes. The elimination of additional authorization categories would help improve Tunisia’s investment climate.
In May 2019, the Tunisian Parliament passed law 2019-47, which contains 38 amendments to address shortcomings in existing laws and regulations that impeded investment. The bill aimed to bring the business climate to “international standards.”
In May 2020, the government adopted decree #2020-316, establishing simplified conditions and procedures for granting project concessions and their monitoring based on a new public-private partnership (PPP) approach. The decree aims to further promote investment by young entrepreneurs (under the age of 35) and projects of all sizes, including those less than $5.5 million.
On October 19, 2022, the GOT issued decree law no. 2022-65, which aims to reduce expropriation and compensation delays. The decree stipulates the creation of an ad hoc government commission that will negotiate directly with owners on the value and compensation terms of expropriated properties. The decree also creates administrative committees within all governorates to expedite expropriation procedures at the regional level.
According to the GOT’s Foreign Investment Promotion Agency (FIPA), overall foreign investment flows for 2022 totaled $716 million, primarily in the form of foreign direct investment (FDI), with only $2.5 million in portfolio investment. This represented a 18.4% increase compared to 2021. The industrial sector received approximately 58.7% of all FDI inflows, while energy (22.2%) and services (18.7%) ranked second and third. Foreign investment in agriculture was insignificant (0.4%). According to FIPA, these capital inflows (excluding the energy sector) generated 13,200 new jobs in 2022. France was the largest foreign investor in Tunisia in 2022, at $200 million. Qatar came in second at $93.77 million, followed by Italy at $75 million, Germany at $70.7 million, and Switzerland at $17.75 million.
Due to the lifting of all travel restrictions associated with the COVID-19 pandemic, more than 6.4 million tourists visited Tunisia in 2022, a 200% increase compared to 2021, but still lower than the record high of 9.4 million in 2019. 2022 overall tourist bed nights increased by 140% compared to 2021. According to Central Bank figures, tourism revenues reached $1.35 billion in 2022, an 83% increase from 2021. According to the Ministry of Tourism’s most recent data, 5 million tourists visited Tunisia through July 2023, an increase of 70% compared to the same period in 2022.
Consumer prices rose by 8.3% in 2022, higher than 2021 (5.7%). Year-on-year inflation was 9.1% in July 2023 and is expected to remain high, hovering around 9% for the remainder of the year.
Tunisia registered a $4 billion current account deficit in 2022 compared to $2.86 billion the previous year. Net foreign currency assets at the end of 2022 amounted to $7.4 billion, corresponding to 100 days of imports. Tunisia’s 2022 trade deficit was $8.12 billion, 40% higher than in 2021.
Political Environment
For background information on the political and economic environment of the country, please click on the link to the U.S. Department of State Countries & Areas website.