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Tunisia’s Economy Grows 2.6% in H1 2018

Kamel, 56, a brass carver and vendor of souvenirs, works at his shop as he waits for customers in the old city of Sousse, Tunisia June 23, 2016. REUTERS/ Zohra Bensemra
Kamel, 56, a brass carver and vendor of souvenirs, works at his shop as he waits for customers in the old city of Sousse, Tunisia June 23, 2016. REUTERS/ Zohra Bensemra
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Tunisia’s Economy Grows 2.6% in H1 2018

Kamel, 56, a brass carver and vendor of souvenirs, works at his shop as he waits for customers in the old city of Sousse, Tunisia June 23, 2016. REUTERS/ Zohra Bensemra
Kamel, 56, a brass carver and vendor of souvenirs, works at his shop as he waits for customers in the old city of Sousse, Tunisia June 23, 2016. REUTERS/ Zohra Bensemra

Tunisia’s national economy grew 2.6 percent in the first half of this year, compared to 1.9 percent in the same period of 2017, the National Institute of Statistics (INS) has said.

Gross Domestic Product (GDP) also grew 2.8 percent year-on-year in the second quarter of 2018 compared to the same period last year, and 0.6 percent in the first quarter of 2018, according to the latest statistics from INS.

This increase is particularly due to the rise in the value added of vital sectors, such as food industries (+2.4 percent), textiles, clothing and footwear (+2.6 percent) and chemical industries, which grew 4.9 percent.

Non-manufacturing industries also posted a 1.3 percent increase in the second quarter of 2018, compared to the same period of 2017, INS said.

The services sector has continued to grow, with a 3.6 percent increase in value added in the second quarter of 2018 due to a growth in hospitality by 11.5 percent.

Despite the positive results, economic expert Ezzeddine Soaidan said that the Tunisian economy has been facing many problems, mainly attracting investments and improving financial resources.

The economy’s growth of 2.6 percent is an important step but it is still not sufficient to achieve the required development and create job opportunities.

Tunisian authorities hope to reach a 3 percent economic growth by the end of 2018. But international agencies have expected a growth of only 2.8 percent.

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IMF: Middle East Conflict Escalation Could Have Significant Economic Consequences

Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
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IMF: Middle East Conflict Escalation Could Have Significant Economic Consequences

Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki

The International Monetary Fund said on Thursday that an escalation of the conflict in the Middle East could have significant economic ramifications for the region and the global economy, but commodity prices remain below the highs of the past year.

IMF spokesperson Julie Kozack told a regular news briefing that the Fund is closely monitoring the situation in southern Lebanon with "grave concern" and offered condolences for the loss of life.

"The potential for further escalation of the conflict heightens risks and uncertainty and could have significant economic ramifications for the region and beyond," Kozack said.

According to Reuters, she said it was too early to predict specific impacts on the global economy, but noted that economies in the region have already suffered greatly, especially in Gaza, where the civilian population "faces dire socioeconomic conditions, a humanitarian crisis and insufficient aid deliveries.

The IMF estimates that Gaza's GDP declined 86% in the first half of 2024, Kozack said, while the West Bank's first-half GDP likely declined 25%, with prospects of a further deterioration.

Israel's GDP contracted by about 20% in the fourth quarter of 2023 after the conflict began, and the country has seen only a partial recovery in the first half of 2024, she added.
The IMF will update its economic projections for all countries and the global economy later in October when the global lender and World Bank hold their fall meetings in Washington.
"In Lebanon, the recent intensification of the conflict is exacerbating the country's already fragile macroeconomic and social situation," Kozack said, referring to Israel's airstrikes on Hezbollah in Lebanon.
"The conflict has inflicted a heavy human toll on the country, and it has damaged physical infrastructure."
The main channels for the conflict to impact the global economy have been through higher commodity prices, including oil and grains, as well as increased shipping costs, as vessels avoid potential missile attacks by Yemen's Houthis on vessels in the Red Sea, Kozack said. But commodity prices are currently lower than their peaks in the past year.
"I just emphasize once again that we're closely monitoring the situation, and this is a situation of great concern and very high uncertainty," she added.
Lebanon in 2022 reached a staff-level agreement with the IMF on a potential loan program, but there has been insufficient progress on required reforms, Kozack said.
"We are prepared to engage with Lebanon on a possible financing program when the situation is appropriate to do so, but it would necessitate that the actions can be taken and decisive policy measures can be taken," Kozack added. "We are currently supporting Lebanon through capacity development assistance and other areas where possible."