Tunisia economic monitor, Spring 2023: reforming energy subsidies for a more sustainable Tunisia
Tunisia's economic recovery slowed in 2022 while the current account and fiscal deficit rose amid mounting global energy and food prices and more working-age people stayed out of the labor market amid diminishing job prospects, according to the World Bank's Spring edition 2023 of the Tunisia Economic Monitor. The report acknowledges Tunisia's significant potential but notes that the country's post-COVID economic recovery continued to be moderate (real GDP grew by 2.5 percent in 2022) due to the current pace of economic reforms, resulting in regulatory barriers to growth. Additionally, the report highlights that reforming energy subsidies can help address the macro-fiscal crisis, improve state-owned enterprises' (SOEs) financial viability, and stimulate the green transition. Published under the title Reforming Energy Subsidies for a More Sustainable Tunisia, the report forecasts Tunisia's GDP growth for 2023 to be around 2.3 percent, subject to significant uncertainty and depending on the progress of financing conditions and structural reforms. The report recommends adopting and implementing a necessary reform agenda to meet Tunisia's external financing requirements and to promote sustainable economic growth.
