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Tunisia’s Economy Grows 2.8% Despite Difficulties

A general view of Tunis, Tunisia. (Reuters)
A general view of Tunis, Tunisia. (Reuters)
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Tunisia’s Economy Grows 2.8% Despite Difficulties

A general view of Tunis, Tunisia. (Reuters)
A general view of Tunis, Tunisia. (Reuters)

The Tunisian economy grew 2.8 percent during the second quarter of 2022 annually, according to the National Institute of Statistics.

The Institute said the growth is due to the high value-added growth rate in the services sector, which amounted to 5.2 percent annually.

However, compared to the growth rate in the first quarter, the gross domestic product (GDP) fell by 1.0 percent due to the decline in the construction and the industrial sector.

Tunisia has been facing a political crisis after President Kais Saied suspended most of the constitutional institutions and put a new constitution to a referendum on July 25.

The country seeks to establish a margin of stability to implement reforms demanded by international financial institutions.

After months of technical consultations, the International Monetary Fund (IMF) announced its willingness to start formal negotiations with Tunisia for a lending program.

Meanwhile, the Tunisian trade balance recorded a deficit of $4.3 billion during the first seven months, compared to $2.7 billion during the same period in 2021, according to the National Institute.

Tunisian exports saw a 23.1 percent increase, and imports rose 31.6 percent.

The Institute revealed a decline in the unemployment rate in the country during the second quarter of this year to 15.3 percent.

The unemployment rate was 16.1 percent in the first quarter of this year and 16.2 percent in the last quarter of 2021.

Thousands of Tunisians leave the country each year due to the difficult economic situation, the faltering political transition since 2011, and the lack of job opportunities.

During the second quarter of 2022, over 626,000 Tunisians were unemployed, a third of whom are graduates, according to the National Institute of Statistics.

The Tunisian National Observatory of Migration estimates that 36,000 individuals leave the country each year due to a lack of job opportunities and low wages.

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Russian Central Bank Head Warns of Turbulent Times ahead Despite Slowing Inflation

Russia's Central Bank Governor Elvira Nabiullina attends a session of the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia, June 20, 2025. REUTERS/Anton Vaganov/File Photo
Russia's Central Bank Governor Elvira Nabiullina attends a session of the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia, June 20, 2025. REUTERS/Anton Vaganov/File Photo
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Russian Central Bank Head Warns of Turbulent Times ahead Despite Slowing Inflation

Russia's Central Bank Governor Elvira Nabiullina attends a session of the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia, June 20, 2025. REUTERS/Anton Vaganov/File Photo
Russia's Central Bank Governor Elvira Nabiullina attends a session of the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia, June 20, 2025. REUTERS/Anton Vaganov/File Photo

The Russian economy has adapted to Western sanctions and inflation is now slowing, but turbulent times and major technological shifts lie ahead, central bank governor Elvira Nabiullina said on Wednesday.

Despite the sanctions, the Russian economy grew by 4.3% last year but is set to slow sharply in 2025, with many officials and economists saying that the current model has exhausted its growth potential.

"We have adapted to some external challenges (but) no, we are facing very turbulent times ahead," said Nabiullina, who is widely credited with steering the Russian economy through the Ukraine military conflict and resulting sanctions.

"But I am confident that this also presents new opportunities for development and for increasing labor productivity in conditions of expensive labor. We base our efforts on this," she told a banking conference.

She stressed that the high cost of labor - spurred by the military spending that has led to a wage growth spiral in many sectors, as well as by curbs on immigration - would remain for a long time, Reuters reported.

Nabiullina said the economy should in future rely entirely on domestic sources of financing as cheap funding from abroad, abundant before the Ukraine conflict, is no longer available.

"In my view, structural adaptation to external constraints has been completed. We have demonstrated our ability to adapt to these challenges, but now we are facing structural shifts of an entirely new kind, primarily technological ones," she said.

"They may have even more far-reaching consequences than what we experienced over the past two years," Nabiullina said, mentioning artificial intelligence applications in the economy as one such challenge.

INFLATION SLOWING

The central bank, which has faced heavy criticism over its tight monetary policy, began cutting its key interest rate last month as prices started to come down, helped by the rouble's strength.

Nabiullina said inflation is now slowing faster than the central bank expected, and there are signs of easing in the severity of labor market shortages.

She said that if economic indicators pointed to a more significant slowdown than anticipated, the central bank would have room for bolder interest rate cuts. She dismissed statements by critics of the bank, who want deeper cuts, that the cooling of the economy was excessive.

Nabiullina also rejected statements from many businessman and bankers that the rouble is now overvalued and should weaken to please exporting companies, which saw their revenues shrink as the rouble rallied by over 40% against the dollar this year.

"A weak exchange rate is often a sign of vulnerability, a result of chronically high inflation and a lack of confidence in one’s own currency. It is hardly something to strive for," she said.