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 it surpasses the pre-COVID-19 levels, having returned to 2019 levels in the last quarter of 2024 and continuing to improve in 2025 and 2026.
The report notes a varied performance across different economic sectors. Industries such as food processing, mechanical and electrical industries, hotels, and restaurants have supported growth, while sectors like hydrocarbons, textiles, and finance have experienced decline. Specifically, during the first half of 2026, agricultural activity increased by 6.4%, and food industries by 8.9%. Conversely, energy, textile, and construction activities decreased by 3.9%, 3.3%, and 1.6%, respectively.
The labor market has also shown signs of improvement, with the unemployment rate dropping to 14.9% in the second quarter of 2026. However, the World Bank cautions that this decrease largely reflects changes in labor market participation rates rather than a significant increase in net job creation. On the external front, the report indicates that higher oil prices and the impact of the Middle East conflict have exacerbated the energy deficit and current account deficit.
The current account deficit increased by 49% in nominal terms during the first half of 2026, and foreign exchange reserves decreased in mid-July 2026 following the repayment of a "Eurobond" issued in 2019. On a positive note, inflation has continued its downward trend, stabilizing at 5.1% in July 2026, down from its peak of 10.4% in February 2023.
The World Bank forecasts that Tunisia's economic growth will reach 2.3% in 2026 and average 2.1% from 2027 to 2028 in the absence of sustainable structural reforms. The report also predicts a current account deficit of 4.1% of GDP in 2026 and a budget deficit of around 6% of GDP, with public debt expected to reach 84.2% of GDP before gradually decreasing to 81.9% by 2028.
A significant portion of the report is dedicated to the challenge of water resources in Tunisia, considered a structural issue for the economy. The World Bank notes that the availability of renewable freshwater resources per capita is below the absolute scarcity threshold of 500 cubic meters per person per year. Despite some improvement in dam water levels during the 2025-2026 hydrological year, the report warns that this does not signify a structural change in the water resources situation.
The World Bank emphasizes that the economic losses due to water scarcity could reach 6.4% of GDP by 2050 if no actions are taken to address the imbalance between water supply and demand. The agricultural sector, which employs 14% of the national workforce and up to 50% of rural workers, is particularly vulnerable. The report suggests that investing in the water sector can directly contribute to job creation and recommends a range of measures, including updating the water code and promoting private sector participation.
Key points
- The World Bank forecasts 2.3% economic growth for Tunisia in 2026.
- Water scarcity could lead to 6.4% GDP loss by 2050 if not addressed.
- The report calls for sustainable structural reforms and investment in the water sector.
