COVID-19: impact of crisis on Tunisia's economy evaluated by ITCEQ
24/05/2020 13:42, TUNIS/Tunisia

(TAP)- The COVID-19 crisis is expected to cause a 46.4% drop in Tunisia's GDP in the 2nd quarter of 2020 (April to June).

The industrial sector will be the hardest hit, with production at 52.7%, followed closely by the services (-49.0%) and agriculture (-16.2%), according to an Project Paper entitled "the impact of COVID-19 on Tunisia's economy, agri-food system and households ", carried out by the Tunisian Institute of Competitiveness and Quantitative Studies (ITCEQ) and made public on Saturday.

These high losses are the result of the 6-week general lockdown imposed by the authorities to contain the coronavirus pandemic.

This measure to combat and prevent the COVID-19 pandemic is costing the Tunisian economy an estimated growth loss of 3.8% for a one-month period and 11.6% for a three-month period, the ITCEQ paper estimates. This is equivalent to 4.0 billion millimes and 12.2 billion, respectively.

430,000 jobs temporarily lost

The number of jobs temporarily lost as a result of the crisis is estimated at 143,000 jobs for one month and 430,000 for three months of lockdown (until June 2020).

According to this study developed in collaboration with the International Policy Research Institute (IFPRI), the income of Tunisian households will fall by an average of 2.9% for the duration of one month of the crisis and 8.6% for three months.

"Absolute income losses are greater for households in Tunisia's urban areas, while the effects for households involved in agriculture and other components of the food system were less severe, except for households whose members work in other economic sectors," the paper found.

It also concluded that most of the economic damage caused by COVID-19 has affected the non-agricultural sectors, mainly due to lower demand for consumers.

Agriculture has proven to be the most resilient sector in the face of this crisis, according to the same survey.

Authors of the paper also recommend continuing the gradual reopening of the economy to avoid the loss of permanent jobs and the increase in the poverty rate in Tunisia.

"The reopening of the economy and related government support to the sectors can also provide new opportunities for economic transformation," they further said.

However, given the magnitude of the effects of COVID-19, the lockdown measures put in place by the Tunisian government in the context of a fragile macroeconomic situation and with the decline in tax revenues due to the freeze on activity will require the authorities to mobilise resources.

Given the magnitude of the health crisis and the global scale of its economic impact, all countries of the world should work together to reopen trade and tourism and to help those countries, such as Tunisia, which need help to overcome this unprecedented crisis, the paper pointed out.

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