2016 Index of Economic Freedom

Tunisia

overall score57.6
world rank114
Rule of Law

Property Rights40.0

Freedom From Corruption40.0

Limited Government

Government Spending73.4

Fiscal Freedom74.0

Regulatory Efficiency

Business Freedom81.3

Labor Freedom64.0

Monetary Freedom75.6

Open Markets

Trade Freedom62.2

Investment Freedom35.0

Financial Freedom30.0

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Quick Facts
  • Population:
    • 11.0 million
  • GDP (PPP):
    • $124.3 billion
    • 2.3% growth
    • 1.8% 5-year compound annual growth
    • $11,300 per capita
  • Unemployment:
    • 13.3%
  • Inflation (CPI):
    • 4.9%
  • FDI Inflow:
    • $1.1 billion
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Despite elevated political, social, and security tensions, Tunisia’s economy has preserved macroeconomic stability. Various reform measures, including reducing subsidies, reforming the public sector, and enhancing regulatory efficiency, have been undertaken, but follow-through has been uneven. Parliament has approved recapitalization of the three largest state-owned banks in a first step toward long-awaited banking-sector reform.

Economic Freedom Snapshot

  • 2016 Economic Freedom Score: 57.6 (down 0.1 point)
  • Economic Freedom Status: Mostly Unfree
  • Global Ranking: 114th
  • Regional Ranking: 11th in the Middle East/North Africa Region
  • Notable Successes: Monetary Freedom
  • Concerns: Rule of Law, Financial Freedom, and Investment Freedom
  • Overall Score Change Since 2012: –1

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Background

Tunisia, birthplace of the Arab Spring, ousted President Zine al-Abidine Ben Ali in January 2011. Shortly thereafter, the formerly banned Islamist Ennahda Party won the largest number of seats in the National Constituent Assembly. The Ennahda government stepped aside in 2014 following ratification of a new constitution in January and was succeeded by an interim technocratic government led by Interim Prime Minister Mehdi Jomaa. During the second half of 2014, Tunisia held its first full parliamentary and presidential elections under the new constitution. Beji Caid Essebsi, former prime minister and leader of the Nidaa Tounes party that he founded in 2012, was elected president in December. Despite notable progress in democratization, social unrest has continued. Unemployment is high, particularly among young people, and the economy remains fragile.

Rule of LawView Methodology

Property Rights 40.0 Create a Graph using this measurement

Freedom From Corruption 40.0 Create a Graph using this measurement

Tunisia continues its difficult transition to stable democracy and establishment of the rule of law. A strong legal framework and systematic practices to curb corruption have yet to take shape. In fact, a majority of citizens say that corruption has increased in the past three years as the breakdown of authority has encouraged graft at lower levels of government and in law enforcement. Property rights are not protected effectively.

Limited GovernmentView Methodology

The top personal income tax rate is 35 percent, and the top corporate tax rate is 30 percent. Other taxes include a value-added tax and a property transfer tax. The overall tax burden equals 21.7 percent of total domestic income. Government spending has decreased to 29.8 percent of GDP. However, the budget balance continues to be negative, and public debt amounts to over 45 percent of GDP.

Regulatory EfficiencyView Methodology

The regulatory framework still lacks transparency and efficiency despite marginal improvements. The rigid labor market has fostered stagnation and failed to facilitate much-needed job creation. The 2015 budget aimed to reduce the deficit to 5 percent of GDP, partly by cutting food and fuel subsidies; the government partially achieved that goal through lower global oil prices.

Open MarketsView Methodology

Tunisia’s average tariff rate is a very high 13.9 percent. Some agricultural imports face additional barriers. State-owned enterprises distort the economy. Foreign investment in some sectors is subject to government screening. The weak financial sector is fragmented and dominated by the state. Access to credit remains limited, and capital markets are underdeveloped. The government plans to sell its minority stakes in eight banks.

Country's Score Over Time

Bar Graph of Tunisia Economic Freedom Scores Over a Time Period

Country Comparisons

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Regional Ranking

rank country overall change
1Bahrain74.30.9
2United Arab Emirates72.60.2
3Qatar70.7-0.1
4Israel70.70.2
5Jordan68.3-1.0
6Oman67.10.4
7Kuwait62.70.2
8Saudi Arabia62.10.0
9Morocco61.31.2
10Lebanon59.50.2
11Tunisia57.6-0.1
12Egypt560.8
13Algeria50.11.2
14Iran43.51.7


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