TUNISIA

Economic Freedom Score

50
25 75
Least Most
free 0 100 free
World Rank: 114 Regional Rank: 11 57.6

D espite elevated political, social, and security tensions,

Tunisias economy has preserved macroeconomic
stability. Various reform measures, including reducing
Freedom Trend
60

subsidies, reforming the public sector, and enhancing

regulatory efficiency, have been undertaken, but fol- 59
low-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. 58

ECONOMIC FREEDOM SNAPSHOT

2016 Economic Freedom Score: 57.6 (down 0.1 point)
57
Economic Freedom Status: Mostly Unfree
Global Ranking: 114th
Regional Ranking: 11th in the Middle East/North Africa Region 56
Notable Successes: Monetary Freedom
2012 2013 2014 2015 2016
Concerns: Rule of Law, Financial Freedom, and Investment Freedom
Overall Score Change Since 2012: 1
Institutional impediments to more dynamic and broad- Country Comparisons
based economic expansion remain deeply entrenched.
While the privileges enjoyed by the politically connected Country 57.6
have decreased substantially since the revolution, the
World
perceived level of corruption remains high, undercutting Average 60.7
trust and confidence in political institutions.
Regional
Average 62.6
BACKGROUND: Tunisia, birthplace of the Arab Spring, oust-
ed President Zine al-Abidine Ben Ali in January 2011. Short- Free
Economies 83.9
ly thereafter, the formerly banned Islamist Ennahda Party
won the largest number of seats in the National Constituent 0 20 40 60 80 100
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
Quick Facts
Interim Prime Minister Mehdi Jomaa. During the second half Population: 11.0 million
of 2014, Tunisia held its first full parliamentary and presiden- GDP (PPP): $124.3 billion
tial elections under the new constitution. Beji Caid Essebsi, 2.3% growth in 2014
former prime minister and leader of the Nidaa Tounes party 5-year compound annual growth 1.8%
that he founded in 2012, was elected president in December. $11,300 per capita
Despite notable progress in democratization, social unrest has Unemployment: 13.3%
continued. Unemployment is high, particularly among young Inflation (CPI): 4.9%
people, and the economy remains fragile. FDI Inflow: $1.1 billion
Public Debt: 47.5% of GDP
How Do We Measure Economic Freedom?
See page 467 for an explanation of the methodology 2014 data unless otherwise noted.
or visit the Index Web site at heritage.org/index. Data compiled as of September 2015.
427
TUNISIA (continued)
THE TEN ECONOMIC FREEDOMS
1Year
Score Country World Average Rank Change

RULE OF Property Rights 40.0 69th 0

LAW Freedom from Corruption 40.0 81st 1.0
0 20 40 60 80 100
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.

GOVERNMENT Fiscal Freedom 74.0 120th 0.3

SIZE Government Spending 73.4 79th +2.6
0 20 40 60 80 100
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 Business Freedom 81.3 24th +0.1

EFFICIENCY Labor Freedom 64.0 69th 5.1
Monetary Freedom 75.6 107th +0.8
0 20 40 60 80 100
The regulatory framework still lacks transparency and efficiency despite marginal improve-
ments. 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 Trade Freedom 62.2 158th +1.0

MARKETS Investment Freedom 35.0 146th 0
Financial Freedom 30.0 132nd 0
0 20 40 60 80 100
Tunisias average tariff rate is a very high 13.9 percent. Some agricultural imports face addition-
al 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.

Long-Term Score Change (since 1995)

GOVERNMENT REGULATORY
RULE OF LAW SIZE EFFICIENCY OPEN MARKETS

Property Rights 10.0 Fiscal Freedom +4.3 Business Freedom 3.7 Trade Freedom +16.8
Freedom from 10.0 Government +4.3 Labor Freedom +1.3 Investment Freedom 35.0
Corruption Spending Monetary Freedom 5.5 Financial Freedom 20.0

428 2016 Index of Economic Freedom