Tunisia’s foreign currency reserves now cover 190% of food and energy imports, according to the External Trade report at current prices for the month of August 2023, recently published by the National Institute of Statistics (INS).

Imports of food and energy have risen to TND 13.8 billion, while the value of foreign currency reserves stands at around TND 26.3 billion, equivalent to 116 days of imports, placing the country near the security threshold of 120 days of imports, as per the data in the report.

Furthermore, the external balance of payments has improved. Many observers project a reduction in the budget deficit this year, despite increased imports, particularly raw materials and semi-finished products totalling TND 18.9 billion, placing pressure on the trade balance.

Additionally, equipment imports for processing reached TND 8.5 billion by the end of August.

For several months, Tunisia has effectively managed its external payments, thanks in part to a reduction in the trade deficit, which decreased from TND 16.9 billion at the end of August 2022 to TND 12.2 billion at the end of August 2023.

The stability in the debt service at TND 6.7 billion, along with increased tourist revenues and remittances from Tunisians residing abroad totalling approximately TND 11 billion, have strengthened the external sector.

Fitch Ratings, the international rating agency, had predicted in a recent note a decrease in Tunisia’s budget deficit to 5.8% of GDP in 2023, compared to 6.9% in 2022.

This reduction is expected to result from streamlining payroll expenses, fiscal reform measures, and improved state resources. Based on this assessment, both twin deficits (budget and balance of payments) are projected to significantly decrease by the end of this fiscal year.

Source: Agence Tunis Afrique Presse