Tunis: The decline in oil prices on the international market will certainly have immediate positive effects on the Tunisian economy, but this will not be the case in the long term, especially if this situation would lead to a recession in the European Union,

Tunisia’s main economic partner, said economist Bassem Ennaifer in an interview with TAP news agency.

Q: The international oil market has recently experienced significant price fluctuations. In your opinion, what are the factors that could help control these prices?

A: The decrease in oil prices on the international market is beneficial for Tunisia in the short term. In the 2025 State budget, the government estimated that a drop in international oil prices (in dollars) would save the state nearly 162 million dinars. Consequently, the fall in oil prices and the appreciation of the dinar against the dollar represent a real opportunity for Tunisia.

However, it is important to note that the preparation of the State budget is not limited to oil prices. Other variables also come into play, such as tax revenues, economic momentum, and wealth creation, all of which are essential to generating long-term resources.

Today, we are witnessing signs of a global economic recession, particularly in Europe, which absorbs 70% of Tunisia’s exports and remains its top economic partner. This situation inevitably affects the performance of Tunisian exporting companies. Moreover, mechanical and electrical industries—whose products are among those exported to the European Union—are the most affected by the Trump tariff war.

Additionally, this year’s decline in revenues from olive oil exports compared to last year will impact both the food trade balance and the overall trade balance.

The international context, which remains heavily dependent on fluctuations in oil prices, will in the long term result in weak global economic growth—including in Tunisia—whose tax revenues, especially those from businesses, will be affected in 2025 and 2026.

In short, we can conclude that while the fall in oil prices on the international market may bring immediate positive effects for the Tunisian economy, it will not be beneficial in the long run, as it will weaken the global economy. This situation will not be advantageous for Tunisia.

Q: What are the repercussions of falling oil prices for Tunisia as a consuming and importing country?

A: The drop will have an immediate effect on government spending and energy subsidies. This situation could affect government revenues in 2025 and 2026, as lower oil prices lead to declining business profits. As a result, corporate tax revenues—which contribute to financing the State budget—would also decline.

Furthermore, the fall in oil prices will reduce the attractiveness of the oil sector and discourage exploration due to lower profitability.

Q: The Minister of Finance recently mentioned a supplementary finance law for 2025. In your opinion, which areas warrant revision?

A: One important point to highlight is that in Tunisia, it is not customary to draft corrective finance laws during the first months of the fiscal year.

This step is generally taken in the final months of the year. It is important to note that the current drop in oil prices will benefit the State budget. Tunisia is also not facing any pressing issues with external or domestic debt that would warrant revising the initial finance law.

However, two aspects deserve reconsideration. First, the projected economic growth rate of 3.2% is a challenging target in today’s unstable global context. Second, the wage bill needs to be revised, particularly in light of the planned recruitment of substitute teachers.

The Ministry of Finance likely has data prompting it to consider revising the 2025 finance law. However, based on currently available information, there is no justification for drafting a supplementary finance law this early in the fiscal year.

It would be more prudent to wait for greater clarity on the economic outlook. Indeed, if a corrective law is adopted now and further changes occur later, another one would have to be drawn up. It is better, for now, to monitor the evolution of the international situation.

Q: Do you think that, in line with its social role, the State could recommend that the technical committee responsible for implementing subsidy reduction mechanisms for hydrocarbons take a decision beneficial to consumers?

A: The State will undoubtedly benefit from lower oil import costs. In fact, last year, the State budget benefited from the international oil price levels, which did not exceed the ceiling assumed for the 2024 fiscal year, thus allowing budget execution and easing financial pressures.

I believe that lowering hydrocarbon prices is not advisable at this time—especially since, as part of its social policy, the State has not raised fuel prices for about two years and has therefore borne a greater subsidy burden to shield citizens.

Moreover, lowering hydrocarbon prices could negatively affect revenues from fuel sales, which are estimated at TND 587 million in the 2025 finance law, compared to TND 457 million in 2024, due to reduced tax income from companies operating in this sector.

It is therefore premature to lower domestic hydrocarbon prices. It would be wiser to wait for prices to stabilise on the global market, giving the State more room to manoeuvre.

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