Tunisia

A consumption-led, timid recovery has increased macroeconomic vulnerabilities. Growth almost doubled to 1.9 percent in 2017, but record fiscal spending and strong credit growth, combined with dinar depreciation, pushed inflation to 7.1 percent in February 2018. The current account deficit widened to 10.1 percent of GDP over 2017 and reserve cover fell to 2.6 months of imports in early March 2018. Public and external debt finished 2017 at 71 percent and 80 percent of GDP, respectively. Discontent about economic conditions and the residual impact of several shocks—notably the 2015 terrorist attacks, political uncertainty, and spillovers from the Libyan conflict—continue to weigh on confidence and policy implementation.