Country Coverage

In January 2014, the National Constituent Assembly adopted Tunisia’s first democratic constitution, three years after protests ousted president Zine El-Abidine Ben Ali. The years since have not been without challenges, as GDP growth and FDI slowed, but the small North African republic still benefits from several comparative advantages, including a large private sector, a strong industrial base, and a skilled labour force. While Tunisia’s transition in the years since the Arab Spring has been relatively smooth compared to neighbouring Libya, the economy has nonetheless grappled with turbulence. Headline growth has slowed, and while the 2014 rate of 2.7% still compares favourably to OECD countries, it is down from an annual average of 5% pre-revolution. Investment inflows have also eased, while exogenous pressures have impacted the country’s current account and balance sheet. However, the country, which traditionally has had a comparatively liberalised economy, retains much of its investment attractiveness, including a competitive labour force and a strong industrial fabric, along with a sophisticated services sector. With an encouraging political outlook, the prospects for growth in the near term are rapidly improving.

Chapter Summary