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Country Forecast Tunisia

  • ID: 2138641
  • April 2016
  • Region: Tunisia
  • 48 Pages
  • The Economist Intelligence Unit
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Background: Following Tunisia's independence from France in 1956, its parliament voted in 1957 to depose the bey (the hereditary ruler). Tunisia became a republic under Habib Bourguiba, who turned the country into a socially progressive but politically repressive state. Zine el-Abidine Ben Ali became the president in 1987 and ran the country along similarly autocratic lines to his predecessor. Following popular protests that began in December 2010, Mr Ben Ali was forced to flee the country in early 2011. Elections to form a permanent government were eventually held in the final months of 2014.

Political structure: A secular grouping, Nidaa Tounes (NT), won the most seats at the legislative election of October 2014. However, the party lacks a majority and has formed a four-party coalition that was approved by parliament in February 2015. A split in NT in November 2015 means that it is no longer the largest party, although the overall coalition maintains a majority. Constitutionally, the prime minister wields the most power, with the president more of a check and balance, but the founder of NT and president, Béji Caïd Essebsi, is arguably the most influential politician.

Policy issues: The new government will have to focus on creating jobs through deregulation, infrastructure development and encouraging private-sector investment if it is to tackle worrying levels of social unrest. Banque centrale de Tunisie (the central bank) faces a difficult balancing act between tackling inflation and boosting liquidity to encourage growth. The new government will try to keep the external and fiscal deficits under control, although this will be difficult.

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Country Forecast Tunisia

Tunisia--highlights: Political outlook

Tunisia--highlights: Demographic outlook

Tunisia--highlights: Business environment outlook

Tunisia--highlights: Economic outlook

Tunisia--highlights: Market opportunities

Tunisia--highlights: Long-term outlook

Fact sheet

Political outlook: Political forces at a glance

Political outlook: Political stability

Political outlook: Political and institutional effectiveness
Restoring a sense of security will be difficult
Tackling corruption will be a tough task

Political outlook: Election watch

Political outlook: Key players to watch
Bèji Caid Essebsi
Habib Essid
Mohsen Marzouk
Rachid Ghannouchi
Moncef Marzouki
Houcine Abassi

Political outlook: International relations

Demographic assumptions
Population growth and household size are akin to Western norms
Creating enough jobs will be difficult
A population shift to coastal regions

Business environment outlook: Business environment rankings
Political gridlock will constrain improvement of business environment

Business environment outlook: Tunisia's business environment at a glance
Policy towards private enterprise and competition
Policy towards foreign investment
Foreign trade and exchange controls
Taxes
Financing
The labour market
Infrastructure

Business environment outlook: Macroeconomic environment
It will take years for the fiscal and current accounts to recover

Business environment outlook: Policy towards private enterprise and competi
Strong lobbying will prevent anything but moderate progress

Business environment outlook: Policy towards foreign investment
Investor confidence will remain low

Business environment outlook: Foreign trade and exchange controls
Discussions over deeper trade ties with the EU will take years

Business environment outlook: Taxes
The government will push for a crackdown on tax evasion

Business environment outlook: Financing
Bank reform is under way

Business environment outlook: The labour market
Job creation is a top government priority

Business environment outlook: Infrastructure
Infrastructure priorities will include development of interior regions
Telecoms services will continue to improve
Stalled road building projects are resuming

Economic forecast: Policy trends

Economic forecast: Fiscal policy

Economic forecast: Monetary policy

Economic forecast: International assumptions

Economic forecast: Economic growth

Economic forecast: Sectoral trends
The important phosphate sector will continue to struggle
The depressed outlook for Europe will be bad for Tunisia

Economic forecast: Inflation

Economic forecast: Exchange rates

Economic forecast: External sector

Economic forecast: Foreign direct investment in Tunisia
Stocks and flows
Origin and distribution
Determinants
Impact
Potential

Market opportunities: Market outlook
Inequality will remain an issue
The middle class will drive consumer spending

Long-term outlook: The long-term outlook
The population will grow slowly and get older
Opponents to market-based reform will continue to slow progress
The economy will grow moderately over the long term

Long-term outlook: Methodology for long-term forecasts
Growth projections
Definitions of variables
The independent variables include:
Summary of findings
Productivity growth

Data summary: Global outlook

Data summary: Gross domestic product, current market prices

Data summary: Gross domestic product, at constant prices

Data summary: Gross domestic product by sector of origin

Data summary: Growth and productivity

Data summary: Economic structure, income and market size

Data summary: Fiscal indicators

Data summary: Monetary indicators

Data summary: Employment, wages and prices

Data summary: Current account and terms of trade

Data summary: Foreign direct investment

Data summary: External debt

Data sources and definitions
Global data
Domestic data
Abbreviations

Guide to the business rankings model
Outline of the model
Calculating the rankings
Measurement and grading issues

Indicator scores in the business rankings model

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