Tunisia International Reserves (months of imports)

International Reserves in Tunisia

After growing 2.4% in 2022, GDP expanded 2.1% year on year in Q1 2023. Domestic demand grew 1.8% (2022: +1.1% yoy), while net exports fell 2.8% (2022: -15.1%). Turning to Q2 2023, the economy may be deteriorating further, amid a months-long drought. The drought means this year’s wheat harvest is set to fall by two-thirds compared to last year, knocking agricultural output and sparking shortages of bread—a staple food in Tunisia. The shortages threaten to inflame inflation and social tensions ahead of the painful reforms the IMF says need to be implemented for it to approve a vital USD 1.9 billion rescue package. The President and the largest trade union have said they oppose the reforms, raising the risk of a balance of payment crisis ahead. More positively, in May, the World Bank said it would likely renew its aid program with Tunisia in June.