Tunisian Economic Crisis Mutes Build-up to Ramadan

 A Tunisian vendor sells olives at a market in Tunis, Tunisia, 08 March 2024. (EPA)
A Tunisian vendor sells olives at a market in Tunis, Tunisia, 08 March 2024. (EPA)
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Tunisian Economic Crisis Mutes Build-up to Ramadan

 A Tunisian vendor sells olives at a market in Tunis, Tunisia, 08 March 2024. (EPA)
A Tunisian vendor sells olives at a market in Tunis, Tunisia, 08 March 2024. (EPA)

Tunisians are bracing themselves for more subdued celebrations during the Muslim holy month of Ramadan as an economic crisis grips the North African country.

In past years "you wouldn't have been able to set foot in the market because it was so crowded", vegetable merchant Mohamed Doryi told AFP.

"That's not the case today," said the 69-year-old, who no longer displays his prices to avoid scaring away potential customers.

Tunisians usually prepare for Ramadan -- when daytime fasting is followed by festive but often costly meals with family and friends -- by stocking up on large amounts of food.

But this year things are different, with purchasing power greatly diminished because of soaring prices, a recession and rising unemployment.

"I'm not poor, but I can't do it anymore. My pension doesn't cover my needs," said Fayka, a 65-year-old at Tunis's working-class Bab El Fellah market.

"This is the first time I've bought fruits and vegetables by the piece" instead of in bulk, the retiree added, asking that only her first name be used.

Tunisia has also been beset by political tensions since President Kais Saied granted himself full powers in July 2021.

A third of its 12 million people currently live below the poverty line after two years of high inflation -- running at 10 percent on average per year -- and the price of many foods has tripled.

GDP growth came in at 0.4 percent last year after severe drought damaged agriculture, and the country entered a recession at the end of 2023.

Unemployment also rose to 16.4 percent at the end of last year, compared with 15.2 percent at the end of 2022.

'Stagflation'

Economist Ridha Chkoundali says Tunisia is "experiencing a period of stagflation, which means a decline in growth and a rise in inflation".

This has been caused by "the deliberate choice of public authorities to prefer to repay debt, especially external debt", he argued.

This came at "the detriment of supplying the market with basic foodstuffs and agricultural inputs" such as fertilizers and fodder.

A shortage of money in the public coffers -- burdened by the salaries of more than 650,000 civil servants -- has meant regular shortages of basic subsidized items including flour, rice, sugar and semolina as the state has difficulties paying for them.

Tunisian banks are being asked by the state to finance the country's debt amounting to 80 percent of GDP, undermining their ability to lend to the private sector and reducing growth even more.

Chkoundali argues that a lack of resources is a result of "the choice to break with the IMF".

In October 2022, the International Monetary Fund agreed in principle to lend Tunisia around $2 billion, but Saied later rejected it on the grounds that the reforms it required in return were not sustainable.

In a Tunis butcher's shop, a 50-year-old woman cautiously ordered 150 grams of veal ahead of Ramadan.

Red meat, which now costs more than 40 dinars (around $13) a kilo, is a luxury in a country where the average salary is 1,000 dinars per month (about $325).

"My husband recently passed away and I can't afford to buy more," she whispered to the butcher.

Mustapha Ben Salmane, 52, told AFP that more and more customers ask for just a handful of minced meat or spicy merguez sausage.

"I can't say no to them. People are exhausted," he said.



IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
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IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA

The International Monetary Fund (IMF) and the Arab Monetary Fund (AMF) signed a memorandum of understanding (MoU) on the sidelines of the AlUla Conference on Emerging Market Economies (EME) to enhance cooperation between the two institutions.

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki, SPA reported.

The agreement aims to strengthen coordination in economic and financial policy areas, including surveillance and lending activities, data and analytical exchange, capacity building, and the provision of technical assistance, in support of regional financial and economic stability.

Both sides affirmed that the MoU represents an important step toward deepening their strategic partnership and strengthening the regional financial safety net, serving member countries and enhancing their ability to address economic challenges.


Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT
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Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT

The Federation of Saudi Chambers announced the formation of the first joint Saudi-Kuwaiti Business Council for its inaugural term (1447–1451 AH) and the election of Salman bin Hassan Al-Oqayel as its chairman.

Al-Oqayel said the council’s formation marks a pivotal milestone in economic relations between Saudi Arabia and Kuwait, reflecting a practical approach to enabling the business sectors in both countries to capitalize on promising investment opportunities and strengthen bilateral trade and investment partnerships, SPA reported.

He noted that trade between Saudi Arabia and Kuwait reached approximately SAR9.5 billion by the end of November 2025, including SAR8 billion in Saudi exports and SAR1.5 billion in Kuwaiti imports.


Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).

Harvard University economics professor Pol Antràs said Saudi Arabia represents an exceptional model in the shifting global trade landscape, differing fundamentally from traditional emerging-market frameworks. He also stressed that globalization has not ended but has instead re-formed into what he describes as fragmented integration.

Speaking to Asharq Al-Awsat on the sidelines of the AlUla Conference for Emerging Market Economies, Antràs said Saudi Arabia’s Vision-driven structural reforms position the Kingdom to benefit from the ongoing phase of fragmented integration, adding that the country’s strategic focus on logistics transformation and artificial intelligence constitutes a key engine for sustainable growth that extends beyond the volatility of global crises.

Antràs, the Robert G. Ory Professor of Economics at Harvard University, is one of the leading contemporary theorists of international trade. His research, which reshaped understanding of global value chains, focuses on how firms organize cross-border production and how regulation and technological change influence global trade flows and corporate decision-making.

He said conventional classifications of economies often obscure important structural differences, noting that the term emerging markets groups together countries with widely divergent industrial bases. Economies that depend heavily on manufacturing exports rely critically on market access and trade integration and therefore face stronger competitive pressures from Chinese exports that are increasingly shifting toward alternative markets.

Saudi Arabia, by contrast, exports extensively while facing limited direct competition from China in its primary export commodity, a situation that creates a strategic opportunity. The current environment allows the Kingdom to obtain imports from China at lower cost and access a broader range of goods that previously flowed largely toward the United States market.

Addressing how emerging economies should respond to dumping pressures and rising competition, Antràs said countries should minimize protectionist tendencies and instead position themselves as committed participants in the multilateral trading system, allowing foreign producers to access domestic markets while encouraging domestic firms to expand internationally.

He noted that although Chinese dumping presents concerns for countries with manufacturing sectors that compete directly with Chinese production, the risk is lower for Saudi Arabia because it does not maintain a large manufacturing base that overlaps directly with Chinese exports. Lower-cost imports could benefit Saudi consumers, while targeted policy tools such as credit programs, subsidies, and support for firms seeking to redesign and upgrade business models represent more effective responses than broad protectionist measures.

Globalization has not ended

Antràs said globalization continues but through more complex structures, with trade agreements increasingly negotiated through diverse arrangements rather than relying primarily on multilateral negotiations. Trade deals will continue to be concluded, but they are likely to become more complex, with uncertainty remaining a defining feature of the global trading environment.

Interest rates and artificial intelligence

According to Antràs, high global interest rates, combined with the additional risk premiums faced by emerging markets, are constraining investment, particularly in sectors that require export financing, capital expenditure, and continuous quality upgrading.

However, he noted that elevated interest rates partly reflect expectations of stronger long-term growth driven by artificial intelligence and broader technological transformation.

He also said if those growth expectations materialize, productivity gains could enable small and medium-sized enterprises to forecast demand more accurately and identify previously untapped markets, partially offsetting the negative effects of higher borrowing costs.

Employment concerns and the role of government

The Harvard professor warned that labor markets face a dual challenge stemming from intensified Chinese export competition and accelerating job automation driven by artificial intelligence, developments that could lead to significant disruptions, particularly among younger workers. He said governments must adopt proactive strategies requiring substantial fiscal resources to mitigate near-term labor-market shocks.

According to Antràs, productivity growth remains the central condition for success: if new technologies deliver the anticipated productivity gains, governments will gain the fiscal space needed to compensate affected groups and retrain the workforce, achieving a balance between addressing short-term disruptions and investing in long-term strategic gains.