Should Tunisia phase out energy subsidies?

Tunisia's energy subsidies have become increasingly costly, averaging 2.1 percent of GDP over the last decade and jumping to 5.3 percent in 2022. Phasing out energy subsidies would help address not only the macro-fiscal crisis but could also improve the energy sector performance and stimulate renewable energy production.

What is Tunisia's energy policy?

Tunisia mostly relies on gas imports to meet its primary energy needs: almost 97% of its electricity generation came from gas in 2016. However, energy policy puts the emphasis on renewable energy.

Will Tunisia's GDP grow in 2023?

Published under the title Reforming Energy Subsidies for a More Sustainable Tunisia, the report forecasts Tunisia's GDP growth for 2023 to be around 2.3 percent, subject to significant uncertainty and depending on the progress of financing conditions and structural reforms.

Does Tunisia need a reform agenda?

The report recommends adopting and implementing a necessary reform agenda to meet Tunisia's external financing requirements and to promote sustainable economic growth. "Tunisia's economy remains under pressure, and reforms are urgently needed to improve the business environment and strengthen competition.

Why did Tunisia refinance Treasury bonds?

Given the limited access to international financing, Tunisia's Central Bank continued refinancing the domestic banking sector for treasury bond purchases. Local financing of the debt remains challenging given that inflation is at its highest level in over three decades (due to rising global prices).

Can reforming energy subsidies help address the macro-fiscal crisis?

Additionally, the report highlights that reforming energy subsidies can help address the macro-fiscal crisis, improve state-owned enterprises' (SOEs) financial viability, and stimulate the green transition.