Tunisia's economy grows by 1.6% in Q1
Tunisia's GDP finally grew by 1.6% year-on-year in the first quarter of 2025, adjusted for seasonal variations, according to the National Statistics Institute (INS).
However, quarter-on-quarter, i.e. compared with the fourth quarter of 2024, GDP fell by 0.2% in volume terms, according to a note made public by the INS on Thursday.
Growth in the first three months of 2025 was primarily driven by the agricultural sector's performance, with a 0.7% increase in value added compared to the same period in 2024. This contributed 0.59 percentage points to overall GDP growth by the end of March 2025.
Similarly, the industrial sector grew by 0.5% in the quarter. The services sector also maintained its positive growth rate, with value added increasing by 1.1%, contributing an estimated 0.66 percentage points to the growth rate recorded for the quarter.
The INS also reported a 3.7% increase in domestic demand, consisting of consumer spending and investment, which is estimated to have contributed 4 percentage points to growth.
Conversely, net foreign trade contributed negatively to growth in the first quarter of 2025 (-2.4 percentage points), as imports grew faster than exports, at 8.6% and 4.5% respectively.
Year-on-year growth rose from 0.3% in Q1 2024 to 1% in Q2 2024, reaching 1.8% in Q3 2024 before settling at 2.4% in Q4 2024.
World Bank projection
No one can predict exactly what will happen to the growth rate by the end of 2025, let alone 2026.
According to the World Bank's latest Tunisia Economic Monitor, titled 'Better Connectivity for Growth', the Tunisian economy is expected to grow by 1.9% in 2025 compared to 1.4% in 2024.
This growth is driven by improved rainfall and the gradual stabilisation of key sectors. Although the manufacturing sector is facing challenges, the resilience of tourism and agriculture is supporting the recovery.
Growth is expected to stabilise at around 1.6–1.7% in 2026–2027. Although global trade uncertainties and limited external financing pose challenges, stronger reform momentum and moderating global trade uncertainty could improve the country's medium-term prospects.
The US tariff effect
Another projection for Tunisia's GDP growth was announced this week by the Fitch Ratings after Tunisia was downgraded in April 2025, when US tariffs were announced to fall from 1.2% to 1.0% in 2025 and from 2.1% to 1.5% in 2026.
These forecasts are more pessimistic than those of the International Monetary Fund (IMF), which expects growth of 1.4% in both years.
However, the direct impact of customs duties on Tunisian growth will be relatively limited, according to the rating agency, since Tunisian exports to the United States amounted to just USD 1.1 billion (2.2% of GDP) in 2024, much less than in many other emerging markets.
The US announced reciprocal tariffs of 28.0% on imports from Tunisia. These were replaced almost immediately, however, by provisional tariffs of 12.3% for 90 days.
Although the Tunisian authorities are currently negotiating with the US to reduce the reciprocal tariff rate, Fitch believes they will still face challenges.
If the tariffs are fully implemented, they will negatively impact exports of key products to the US, such as olive oil and dates.
Conversely, the impact of US tariffs on the growth of Tunisia's main trading partners (notably the Eurozone) will be more significant.
In response to the change in US policy, Fitch has lowered its growth forecasts for the eurozone from 1.2% to 0.6% in 2025 and from 1.4% to 1.2% in 2026.
Growth in Tunisia's three main export markets: France, Italy, and Germany will remain below 1.0% in both years.
Fitch had already anticipated a decline in demand for Tunisian exports to the eurozone this year, particularly olive oil, and the rating agency stated that 'we now expect the decline to be even sharper'.
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