| Summary: | Due to disruptions in international trade and tourism triggered by the COVID-19 (coronavirus) pandemic, the Tunisian economy contracted by unprecedented levels during 2020. Fortunately, recent data indicates that the economy stabilized during the first quarter of 2021, with quarter-over-quarter (q-o-q) growth no longer in negative territory. In comparison with regional peers, Tunisia experienced a sharper contraction than others, having entered the crisis while already experiencing slow growth, limited fiscal space, and rising debt levels. While the government managed the first phase of the pandemic well from a health standpoint, this early success waned as controls were relaxed later in 2020. A record 13.3 decline in the tradable services sector and a 11.7 percent drop in exports contributed towards the 8.8 percent economic contraction, as weak global demand depressed industrial and tourism exports throughout 2020. As a result, unemployment rose from 14.9 to 17.4 percent, contributing to the wave of protests breaking out around the country on the 10-year anniversary of the Arab Spring. Some of the recent gains made in poverty reduction will be lost because the share of the population vulnerable to falling into poverty increased during 2020 due to the impact of COVID-19 on the economy
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