Summary:

On 3 January 2023, the Tunisian government released a three-year economic development plan, with President Kais Saied referring to the plan as “prudent.” The plan presumed receipt of a $1.9 billion loan from the International Monetary Fund (IMF) that has yet to be finalized after multiple delays by the IMF Executive Board. The plan assumes over 2% growth in the economy and details a broad array of investments totaling over $12 billion. Phosphate production in the country’s south, having historically faced issues with corruption and a lack of environmental sustainability, will be tripled. Some restrictions on the use of farmland have been lifted to allow the construction of solar and wind energy production facilities.

Outlook:  

The plan makes ambitious assumptions about overall growth and receiving credit from the IMF and private lenders, even as concerns grow about Tunisia’s political and economic risk and inflation looms on the horizon. The implementation of the economic plan will likely lead to further disruptions in the form of strikes and demonstrations as painful reforms necessary to salvage the economy are attempted. The UGTT in particular will be looking for opportunities to flex its political muscle in order to resist the austerity measures insisted upon by the IMF.

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