Tunis — Tunisia's expectations for economic growth saw a sharp downward revision last week, reflecting the cost of ongoing political turmoil and security concerns.
"It was decided to recalculate GDP growth in Tunisia for the second time, first down from 4.5 to 4 and now down to 3.6 per cent for the full year of 2013, against the backdrop of the difficult economic situation experienced by the country," Finance Minister Elyes Fakhfakh announced on Friday (August 30th).
He noted "the high volume of subsidies, particularly fuel subsidies, which have sapped considerable financial resources of the state since 2011".
"The government seeks to find a radical solution to the dilemma of subsidies such as on fuels and basic commodities by channelling them to their direct beneficiaries," the finance minister said.
Standard & Poor's (S&P) had already downgraded Tunisia's sovereign credit rating from BB- to B.
"We view the popular legitimacy of Tunisia's transitional institutions as increasingly contested, jeopardizing the approval of a new constitution, holding of elections, and implementation of growth-promoting economic reforms," the ratings agency announced on August 16th.
"Furthermore, perceived increased terrorist risks could threaten tourism which remains a pillar of the Tunisian economy, as well as foreign and domestic investment," S&P added. GDP was also likely to shrink to 1.4%, the ratings agency said.
"The economic situation prevailing today in Tunisia is very difficult, if not catastrophic." economic expert Mouez Joudi told Magharebia.
He blamed the lack of security and political stability in the country for the downturn.
"The value of the Tunisian dinar slid by 10 per cent between July 2012 and July 2013, in addition to inflation, which reached 6.5 per cent in 2013 and the trade deficit, which reached 5.5 billion dinars in late July 2013," he noted.
Tunisian citizens say they are feeling the effects.
"The continuous rise in the prices of basic products is clear evidence of the dire economic situation in which we live," said Tunis resident Mouna el-Mahdi.
"My monthly salary, as well as my husband's, is no longer sufficient to cover the expenses of the home and the kids. This is what makes us fear worse in the near future," she added.
Mostafa Dalleji, an unemployed 33-year-old, said he was optimistic after the revolution but now despairs of finding work and considers emigrating.
Emna Rouissi expects things to improve. "This phase is only a transition. I am sure we will overcome these difficulties and Tunisia will be better than before."
"However, we can only achieve that by uniting our efforts, steering clear of political rancour and making Tunisia our first and last goal," she added.