(Ecofin Agency) - According to the institution, Tunisia's GDP growth should stand at 1.2% in 2023, due in particular to persistent drought, external financing challenges, and the growing debt of several public enterprises.

Tunisia's economy is set to grow by an average of 3% a year between 2024 and 2026, according to a World Bank report published on November 6, 2023.

The Bank’s forecast is, however, "subject to significant downside risks linked to developments in the drought as well as the pace of structural reforms planned by the government and financing conditions", according to the report entitled “Tunisia Bulletin de conjoncture économique : migration dans un contexte économique complexe”.

For 2023, the WB expects Tunisia's GDP growth to be limited to 1.2%, due in particular to persistent drought, external financing challenges, and the growing debt of several major public enterprises.

However, the lender said there have been some positive developments this year, citing notably improved terms of trade and a recovery in the tourism sector.

Indeed, Tourism revenues rose by 47% up to the end of August 2023. Combined with transport services, the two sectors contributed 0.8 percentage points to overall GDP growth.

"Despite persistent challenges, the Tunisian economy is showing resilience. Increased exports from the textile sector, mechanical industries, and olive oil, combined with growth in tourism revenues, have helped mitigate the external deficit," said World Bank Resident Representative for Tunisia Alexandre Arrobbio, quoted in the report.

"Strengthening competition, improving fiscal space, and adapting to climate change are essential measures aimed at restoring economic growth and building resilience to future economic and climate shocks," he added.