Tunis/Tunisia — The growth rate in Tunisia is expected to stand at 3% in 2022, hit 3.5% in 2023 and fall back to 3.3% in 2024, according to the Global Economic Prospects June 2022, released Tuesday by the World Bank (WB).
"In Tunisia, the recovery was only modest in 2021 and the country is facing multiple economic shocks with no access to international market financing, while in the midst of a complex political transition. Unemployment in Tunisia remains elevated at 16.1 percent, with no space for policy stimulus," the report reads.
Tunisia remains one the most vulnerable countries to climate change and the Russian-Ukrainian war, given the "high dependence on food imports from Russia and Ukraine."
"Average growth for the region at 5.3 percent in 2022, its fastest pace in a decade, masks a highly differentiated experience and a trend in the wrong direction. Growth will slow abruptly in 2023 and 2024 across the region. The current rebound is due mainly to strong growth in oil exporters boosted by rising oil revenues and a general waning of the pandemic's adverse impacts in highly vaccinated countries. GCC economies are forecast to grow by 5.9 percent in 2022, 1.2 percentage points higher than forecast at the start of the year," the WB points out.
"Global growth is expected to slump from 5.7 percent in 2021 to 2.9 percent in 2022-- significantly lower than 4.1 percent that was anticipated in January. It is expected to hover around that pace over 2023-24, as the war in Ukraine disrupts activity, investment, and trade in the near term, pent-up demand fades, and fiscal and monetary policy accommodation is withdrawn. As a result of the damage from the pandemic and the war, the level of per capita income in developing economies this year will be nearly 5 percent below its pre-pandemic trend," according to the report.
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The June Global Economic Prospects report offers the first systematic assessment of how current global economic conditions compare with the stagflation of the 1970s--with a particular emphasis on how stagflation could affect emerging market and developing economies. The recovery from the stagflation of the 1970s required steep increases in interest rates in major advanced economies, which played a prominent role in triggering a string of financial crises in emerging market and developing economies.
"Developing economies will have to balance the need to ensure fiscal sustainability with the need to mitigate the effects of today's overlapping crises on their poorest citizens," said Ayhan Kose, Director of the World Bank's Prospects Group. "Communicating monetary policy decisions clearly, leveraging credible monetary policy frameworks, and protecting central bank independence can effectively anchor inflation expectations and reduce the amount of policy tightening required to achieve the desired effects on inflation and activity."
