finance & economy

Tunisia's GDP expected to grow by 2.9% in 2021 (WB)

October 11, 2021

TAP)-Tunisia's gross domestic product (GDP) is expected to grow by 2.9% in 2021, after contracting by 11.5% in 2020, according to a World Bank Middle East and North Africa (MENA) economic Update entitled 'Overconfident: How Economic and Health Fault Lines Left the Middle East and North Africa Ill-Prepared to Face COVID.'

GDP per capita, which is used to measure a population's living standard, is expected to reach only 0.4% in 2021, after falling by 13.6% in 2020, the bank estimates in this update released on Thursday.

In the MENA region, the WB expects a ' tenuous and uneven' due to the pandemic, adding that this part of the world was hardly prepared to respond to COVID-19, due to its long-term socio-economic conditions and underfunded public health systems.

Thus, regional GDP is expected to grow by 2.8% in 2021, after a 3.8% contraction in 2020.

The GDP per capita is expected to grow by 1.1% in 2021, following a 5.4% decline in 2020.

Overall, the output cost of COVID-19 so far in MENA is almost $200 billion, a number estimated by comparing the region’s forecast GDP level with a scenario where there was not any COVID.

//The region’s recovery will also depend on a rapid and equitable rollout of vaccines //

'While MENA was not unique in having faced a dreadful pandemic that exhausted available public health resources, MENA was unique compared to the rest of the world in how it ended up ill-prepared to absorb the shock of Covid-19,' said World Bank Vice President for the MENA Region Ferid Belhaj.

He called for a strong focus on building core public health functions, embracing and leveraging the power of data openness to help promote the region’s recovery and transition towards market institutions.

The region’s recovery will also depend on a rapid and equitable rollout of vaccines, while for some countries additional growth risks are posed by ongoing political uncertainty.

This edition looks specifically at how the region’s ill-prepared health systems hampered the response to the pandemic. MENA was one of the only regions in the developing world where government expenditure as a share of GDP increased during the decade prior to the pandemic, rising from 16% to 18% between 2009 and 2019.

This legacy of large public sectors and high public debt crowded out investments in public health, which weighed on the ability to respond to the health crisis. Going forward, countries will have to pay more attention to timely public health data and overcome a historic underinvestment in vital public health systems.

Since the beginning of the COVID-19 pandemic, the Bank has mobilised over $157 billion to address the health, economic and social repercussions of this crisis, deploying a response of unprecedented speed and scale since its creation.

The WB intends to raise $20 billion in financing for this purpose until the end of 2022.

As the pandemic persists, the World Bank will continue to support the region, not only to facilitate short-term responses and disaster relief needs, but also to address systemic data system and institutional needs required to strengthen the foundations for more resilient, effective, and equitable health care systems in the years to come.

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