The World Bank has released its summer 2026 economic report on Tunisia, highlighting the country's ongoing economic recovery. According to the report, Tunisia's economy has shown resilience, with a 2.7% growth in real GDP in 2025 and 2.4% growth in the first half of 2026. This growth is notable, as the country's economy has surpassed its pre-COVID-19 levels, returning to 2019 levels in the last quarter of 2024 and continuing to improve in 2025 and 2026.
The report notes that various sectors have contributed to this growth, including food industries, mechanical and electrical industries, hotels, and restaurants. However, other sectors such as fuel, textiles, and finance have experienced decline. In the first half of 2026, the agricultural sector grew by 6.4%, while the food industry grew by 8.9%. Conversely, energy, textile, and construction activities declined by 3.9%, 3.3%, and 1.6%, respectively.
The World Bank also reports a decline in unemployment rates, which dropped to 14.9% in the second quarter of 2026. However, this decrease is largely attributed to changes in labor market participation rates rather than the creation of new job opportunities. The report also highlights Tunisia's external balance challenges, with a 30% increase in the energy trade deficit and a 49% increase in the current account deficit in the first half of 2026.
Inflation rates in Tunisia have continued to decline, reaching 5.1% in July 2026, down from a peak of 10.4% in February 2023. The World Bank predicts that Tunisia's economic growth will reach 2.3% in 2026 and an average of 2.1% from 2027 to 2028, assuming no major structural reforms. The report also forecasts a current account deficit of 4.1% of GDP in 2026 and a budget deficit of 6% of GDP, with public debt expected to reach 84.2% of GDP before gradually decreasing to 81.9% by 2028.
The World Bank has identified water scarcity as a significant structural challenge for Tunisia's economy. The report notes that the country's freshwater resources are below the absolute scarcity threshold of 500 cubic meters per person per year, and rainfall has been below average for eight of the past ten years. Although the 2025-2026 hydrological year saw improved dam water levels, the World Bank views this as a temporary reprieve rather than a long-term solution.
The report warns that water scarcity could have significant economic implications, with estimated losses potentially reaching 6.4% of GDP by 2050 if no action is taken to address the imbalance between water supply and demand. The agricultural sector, which employs 14% of the workforce and up to 50% of rural workers, is particularly vulnerable to these risks, along with tourism, food industries, and manufacturing.
The World Bank recommends that Tunisia invest in the water sector to create jobs and ensure water security, which is closely linked to environmental, infrastructure, and growth aspects. The report suggests that addressing the challenges in the water sector requires not only investment in infrastructure but also developing the legal framework, improving institutional and operational performance, and adopting suitable investment models. The World Bank supports Tunisia's "Water 2050" plan, emphasizing the need to translate this strategy into sustainable results.
Key points
- Tunisia's economy shows resilience with 2.7% GDP growth in 2025
- Water scarcity poses significant structural challenges to Tunisia's economy
- The World Bank recommends investing in the water sector to create jobs and ensure water security
