Tunisia's Ministry of Finance has released a report on the execution of the 2026 budget, highlighting significant deviations from initial projections. The 2026 budget was based on an oil price of $63.3 per barrel, but the actual price averaged $92.6 per barrel in the first half of the year. This discrepancy has resulted in increased energy subsidies and a widening trade deficit. The report notes that the country's economic growth has been slow, with a 2.6% growth rate in the first quarter of 2026, falling short of the 3.3% target.
The report attributes the increased energy costs to the conflict in Ukraine and global economic shifts. The country's energy import bill has surged, with the deficit in energy trade rising by 30% to 6,779 million Tunisian dinars (MDT). The overall trade deficit has also widened by 26.9% to 12,569 MDT. The report notes that the dinar has appreciated against the dollar, which has helped mitigate some of the increased costs. However, the country's reliance on imported energy has put pressure on the budget.
The 2027 budget is expected to be based on an oil price range of $75-80 per barrel, which is more conservative than previous projections. However, the government has not provided detailed financial projections, including growth rates, inflation targets, or deficit goals. The report cites global economic forecasts, including a 3.4% global growth rate in 2027, but does not provide specific projections for Tunisia. This lack of transparency has raised concerns among lawmakers and economic analysts.
The report notes that the country's economic growth has been driven by the agricultural sector, which has seen a 6.8% increase in the first quarter of 2026. However, the manufacturing sector has experienced a slowdown, with a 0.4% decline in the same period. The report also highlights the need for structural reforms to boost economic growth and improve competitiveness.
The government's budget plans for 2027 include vague objectives, such as "pursuing improvement in economic growth" and "maintaining stability in the exchange rate." However, specific targets and projections are noticeably absent. This lack of clarity has raised concerns among lawmakers, who will be tasked with examining the budget proposal.
The budget proposal also faces challenges due to rising commodity prices, including wheat, which has seen a 24-dollar increase in price per tonne over the past year. The report notes that the government has not provided a clear plan for managing these increased costs, which could have significant implications for the budget.
The 2027 budget faces significant uncertainty due to global economic shifts and rising commodity prices. The government's limited financial projections have raised concerns among lawmakers and economic analysts, who are calling for greater transparency and clarity in the budget proposal.
Key points
- The Tunisian government's 2027 budget faces uncertainty due to global economic shifts and rising commodity prices.
- The government has not provided detailed financial projections, including growth rates, inflation targets, or deficit goals.
- The budget proposal includes vague objectives, but specific targets and projections are noticeably absent.
