Tunisian economy contracts 22% as COVID-19 continues to cripple key sectors

TUNISIA – The economy of Tunisia which is highly dependent of Tourism has continued to suffer from the effects of the COVID-19 pandemic.

A report by Reuters Africa indicated that the economy of the North African country shrank 21.6 pct in the second quarter of 2020, compared to the same period last year, due to the coronavirus crisis.

The poorly performing economy has negatively impacted the livelihood of many Tunisians, pushing unemployment to new record levels.

Tunisia’s state statistics institute reported that the country’s unemployment rose to 18 percent in the second quarter.

The number of unemployed people in Tunisia is expected to increase by 275,000, according to a government study in partnership with the United Nations, investment minister Slim Azzabi said.

This would raise the unemployment rate to 21.1% in 2020, up from about 15% at the start of the year.

Apart from tourism, the COVID-19 pandemic greatly affected production in almost all sectors of the economy resulting in a sharp decline of exports.

Data from the Institute of Statistics show that the total value of trade exchanges amounted to about 14.921 billion dinars of exports, compared to 21.021 billion Tunisian dinars of imports.

To arrest the adverse impacts of the COVID-19 crisis, the government of Tunisia ended all restrictions on movement and businesses and opened its sea, land and air borders late last month.

However, these measures are yet to have any impact particularly on the Tourism, which contributes nearly 10% of gross domestic product and is a key source of foreign currency.

Tourism revenue in the first six months of this year fell by more than 50% when compared to the same period of 2019 as western tourists deserted Tunisia’s hotels and resorts.

Tunisia’s Minister of Investment and International Cooperation projected that the Maghreb nation’s economy would shrink by around 7 percent this year.

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