Tunisia's macroeconomic difficulties (average inflation estimated at 9.8% and a trade deficit of TND 22.4 billion for 2023...) show, to a large extent, the cost of inaction and non-reform," according to PBR Rating.
This financial rating agency, initiated and sponsored by the Banking and Finance Council, has just unveiled the latest version of its quarterly study analysing macroeconomic and sectoral risks in Tunisia.
"After several difficult years, marred by a domestic structural economic crisis and major external impacts, the Tunisian economy is still struggling to regain momentum and build a new cycle of growth," the agency points out.
"The private sector and the central government's financial situation leave no prospect of a lasting and substantial economic recovery without major structural reforms. In addition to the measures discussed with international partners to support public finances and balance the budget (with an estimated budget deficit of 5.5%, under the 2023 Finance Law), the country needs major economic reforms that will have a major impact on the crucial development issues in Tunisia, namely boosting investment, stepping up exports, energy and resources management, the labour market, unleashing productive potential and solving the problems of setting costs and margins (notably in agriculture, market and non-market industries)."
"In-depth study is needed of the central government's role in light of the structural imbalance between prerogatives on the one hand and resources on the other. The viability of state coverage, in terms of economic activities and social interventions, cannot be determined simply by decision or strategic vision, but also by the means made available; a strong state service that is both real and effective."
"Throughout 2023, the resilience of the economic fabric will continue to be underpinned by a general fall in margins, a decline in savings, very tight cash management and a reluctance to build up minimum stock levels. Some value chains risk switching to brokering and trading (of imported products) instead of production and industrialisation."
However, as the PBR Rating study points out, sector mapping shows that there is considerable potential for the Tunisian economy.
Manufacturing industries represent a key source of value creation and jobs ( notably in textiles, mechanical engineering and electronics), given the new global trends in terms of relocation, technological redeployment and non-price competitiveness.
Failing a revival by boosting the local traditional construction sector, the building materials industries are enjoying a rebound in Libyan demand, as well as the need to refurbish hotel units, for which the tourist season looks promising, with the goal of outperforming the 2019 financial year.
"The activities of recycling and recovery, production of green energy and chemical transformation are all sources of wealth creation, pending the adjustment of their regulatory frameworks (administrative and legal).
It is important in this connection to point out the downward trend in imports of certain capital goods and other semi-finished products or raw materials used as a basis for industries, notably export industries. The health industry is still under-exploited, given its export potential and its ability to lighten the national burden in terms of medical cover..."
The PBR Rating report is based on a dual methodology (economic and econometric), designed to raise awareness among financial institutions of the risks and opportunities of financing the main economic activities, and to model future changes in terms of financing opportunities and value creation.
Source: Agence Tunis Afrique Presse
