Tunisia's macroeconomic indicators continue to be impressive. According to government statistics, the Gross Domestic Product (GDP) grew 6.2 percent in 1999, above the ten-year average of about four percent but down from the 1996 high of 6.9 percent. The inflation rate dropped to 2.7 percent in 1999 (the lowest in 27 years), down from 3.1 percent in 1998, well below the ten-year average of about 5.1 percent. The government budget deficit rose to 3.5 percent in 1999 after declining to 1.4 percent in 1998 due to proceeds from the privatization of two cement plants. Improved receipts from the government of trade's privatization program in 2000 could again drop the budget deficit to a rate below two percent. The debt service ratio (as a percentage of current receipts) continued its small but steady annual decline from 16.5 percent in 1998 to 16.4 percent in 1999. Tunisia's current account declined from 5.0 percent of GDP in 1998 to 4.5 percent in 1999. Foreign exchange reserves increased during that period to a level that is equivalent to about four months of import coverage at the end of 1999.
Tunisia's timely completion of its IMF program (1987 -1994) and subsequent fiscal conservatism have won it investment grade ratings from a number of international institutions.
A member of GATT since 1990 and of the World Trade Organization (WTO) since that organization's inception, Tunisia has concentrated its efforts on developing export-led growth. Textiles and tourism continue to be Tunisia's primary foreign exchange earners. Total textiles and leather gross export earnings increased by 3.1 percent in 1999 to TD 3.21 billion. Tourism, Tunisia's highest net earner of foreign exchange followed at just over TD 1.95 billion in gross revenue for 1999 as an increase of 13.8 percent from the year before. Other important export sector earnings were petroleum products, which rebounded strongly with the rise in world oil prices, and increased 19.2 percent in 1999 with revenues of TD 497.9 million; olive oil, which increased 79.4 percent to TD 382.7 million; and automotive wire and cable assemblies (Tunisia has 56 such plants that comprise a large part of its light manufacturing capability), which grew 19.3 percent to TD 361.0 million.. General trade figures in 1998 show exports of TD 56.97 billion (up 6.9 percent from 1998) and imports of TD 10.1 billion (up 6.0 percent).
Principal Growth Sectors
Constant GDP (base year 1990) was TD 16.5 billion in 1999, up 6.2 percent from 1998 (in dollar terms constant GDP actually fell 2.6 percent). Services (principally tourism) account for almost 36 percent of GDP, followed by manufacturing industries (17.7 percent of GDP), agriculture and fishing (14.7 percent), and the energy and mining sector, which contributed 11.0 percent of GDP.
The manufacturing sector is dominated by the textile industry. Textile and leather production accounts for one-third of the manufacturing sector's share of GDP, approximately TD 1.6 billion. Agribusiness is the country's second most important manufacturing sector, followed by electrical and mechanical industries.
Tourism is equally important to the services sector, both as a source of foreign exchange and as a major employer of domestic labor. (Approximately 270,000 Tunisians are directly or indirectly employed in tourism-related areas.) In 1999, the number of tourists surpassed five million for the first time, and occupancy rates increased to 56.5 percent from 52.5 percent the previous year. Industry experts expect increased revenues in 2000, as an economic upturn in Europe and Tunisia's marketing of more lucrative desert tourism attracts more tourists to its shores. At the start of the high season, several hotels in the resort areas were overbooked. The ministry also aims to increase Tunisia's revenue-per- tourist. (According to the ministry of tourism, tourists in morocco spend an average of eight times as much money in country as do those in Tunisia.)