Tunisia: understanding $1.67 billion trade deficit in the first quarter of 2025

The deterioration in Tunisia’s foreign trade during the first three months of the year is primarily due to a contraction in exports, combined with a continued rise in imports. Exports fell by 5.9%, reaching USD 5.13 billion compared to USD 5.45 billion a year earlier (15.325 billion dinars, down from 16.288 billion). At the same time, imports rose by 5.5%, reaching USD 6.82 billion (20.375 billion dinars), up from USD 6.46 billion (19.315 billion) in 2024. As a result, the coverage rate of imports by exports dropped to 75.2%, compared to 84.3% a year earlier  an alarming signal for the country’s external stability.

Energy and agri-food: struggling export sectors

Sectoral analysis reveals a marked deterioration across several strategic industries. The energy sector saw a 34% collapse in exports, largely due to a sharp decline in refined product sales (from 499.3 MD to just 78.2 MD5, 13 billion). This drop, although slightly offset by a 9.6% decline in energy imports, continues to weigh heavily on the trade balance. Agri-food industries also suffered a sharp 18% drop, driven by a significant fall in olive oil revenues, which declined from 1.879 billion dinars to 1.442 billion.

Other industrial sectors have not been spared: -2.4% for mechanical and electrical industries, -2.6% for textiles, clothing and leather, and -8.6% for mining, phosphates and derivatives. This broad decline in exports illustrates a weakening of Tunisia’s competitiveness on international markets.

Imports: a troubling dynamism

On the imports side, growth is mainly driven by the acquisition of capital goods, up 18.3%. This trend may reflect renewed investment in certain productive sectors, although it increases the trade deficit in the short term. Imports of raw materials and semi-finished goods rose by 5.1%, while consumer goods imports grew by 13.9%. Only imports of energy products (-9.6%) and food products (-2.1%) saw a decline, helping to partially curb the widening of the overall deficit.

This growing deficit results from a combination of both cyclical and structural factors. On the export side, the decline is marked by: revenues from olive oil traditionally one of Tunisia’s main export products which fell by nearly 25% compared to 2024, due to a poor harvest caused by drought. The textile sector, also in decline, is suffering from a slowdown in demand in Europe, Tunisia’s primary market.

A deficit mainly driven by energy

The trade deficit remains largely driven by the energy sector, which posted a negative balance of USD 964.2 million (2.881 billion dinars), accounting for more than half of the total deficit. This is followed by raw materials and semi-finished products (-1.616 billion dinars), capital goods (-927.9 MD), and consumer goods (-239.5 MD). In contrast, the food sector stands out by generating a surplus of 614.8 million dinars, thanks to strong exports of basic agricultural products. Notably, excluding energy, the trade deficit drops to USD 725.6 million (2.168 billion dinars), highlighting how energy dependency remains the Achilles’ heel of Tunisia’s trade balance even if the energy deficit shows a slight improvement compared to 2024 (from 2.943 billion dinars to 2.881 billion).

A concerning macroeconomic equation

This imbalance has immediate repercussions on the balance of payments, which is deteriorating further. In the absence of sufficient foreign direct investment or tourism revenues to meet financing needs, Tunisia is dipping into its foreign exchange reserves. The dinar is feeling the impact: its gradual depreciation against the euro and the dollar is increasing the cost of imports and fueling imported inflation.

According to analysts at the Central Bank of Tunisia (BCT), this dynamic could trigger a snowball effect on external debt, which is largely denominated in foreign currencies. The state is thus forced to mobilize more resources to service its debt, to the detriment of development spending.

This deep trade imbalance increases pressure on the balance of payments and foreign currency reserves, while fueling the volatility of the Tunisian dinar. Such a trend not only weakens purchasing power but also hampers the economy’s capacity to finance its real sector.

The recurring deficit reveals the lack of a strong industrial base, an effective import substitution policy, and chronic delays in the energy transition. Without a recovery plan built around reviving local production, supporting exports, and a targeted investment strategy, Tunisia risks remaining trapped in a cycle of successive deficits a situation incompatible with sustainable growth.