External financing may buoy Tunisia's economy

Subject

Prospects for the Tunisian economy since the formation of the coalition government.

Significance

Headwinds to the Tunisian economy are emerging from many directions: industrial action, a security-related shock to tourism and poor rainfall are all providing significant resistance to government efforts to stimulate economic activity. A great deal of focus will turn to how the government handles the many economic and security disruptions it faces.

Impacts

• The decline in global oil prices gives the government some modest breathing space for the national budget.
• It should also lay the groundwork for longer-term subsidy reduction.
• However, it will not provide much of a boost to the economy since it is not directly passed through to businesses and consumers.