Industrial Capex Rises Amid Tight Tunisian Financing

Tunisia’s declared industrial investment reached TND 1,451.3 million by 30 September 2025, equivalent to roughly USD 492 million at an average USD/TND of 2.95 for mid-2025. On a GDP-normalised basis, that is about 0.9% of 2024 nominal output, a narrow but positive inflection after multi-year compression in fixed capital. The data are calendar year to date and capture approved projects logged by the national agency; they exclude one-off projects above TND 100 million to avoid skewing trends.

The composition signals a policy pivot toward domestic value chains: mechanical-electrical industries account for TND 342.9 million, agro-food and construction materials accelerate, and textiles and leather rebound off a low base. Foreign participation totaled TND 307 million while domestic investors provided TND 1,144 million, indicating that recovery remains locally financed under tighter external conditions.

Policy settings explain the mechanism. The Central Bank of Tunisia cut its policy rate from 8.0% to 7.5% in March 2025 and has held steady since, while annual inflation slowed from 7.0% in 2024 to 5.0–5.4% in August–September 2025. Real rates have moved from negative toward mildly positive territory, compressing speculative consumption but not yet catalysing broad credit creation. Private-sector lending expanded only about 2–3% year on year in mid-2025, constrained by elevated non-performing loans and bank capital buffers. On the fiscal side, debt stands near 80–81% of GDP for 2024, and financing needs have increased reliance on domestic sources, which tightens the crowding-out channel for industry. The government’s choice to prioritise import-substituting intermediate goods mitigates external vulnerability, given that the euro area buys roughly half of Tunisia’s merchandise exports and is growing at sub-1% in 2025.

Macro impact is visible in utilisation and trade. Capacity utilisation in key clusters has risen into the mid-70s from the high-60s in 2024, consistent with the declared investment pipeline and a modest export rise of 2.5% in the first three quarters of 2025 from industrial sectors including mechanical-electrical, agro-food, chemicals, textiles and leather. The current-account deficit narrowed to about 2.7% of GDP in 2024 but widened to roughly 1.8–1.9% of GDP in the first half of 2025 on weaker terms of trade and softer European demand. Foreign-exchange reserves slipped from the equivalent of about 121 import days at end-2024 to near 100 days by mid-2025, keeping the policy mix cautious. The dinar traded broadly stable in 2025, fluctuating between roughly 2.92 and 3.20 per USD, which reduces imported-inflation pass-through but limits the competitiveness boost that a larger depreciation might deliver.

Markets have registered the improvement but still price constraint. Five-year local bonds yield near 10–10.5% and the 2029 USD bond complex trades around 700–750 basis points over U.S. Treasuries, tighter by roughly 75–100 bps since June 2025 on global risk rotation and disinflation progress. Equity liquidity remains thin and the local index’s correlation with real-economy investment is weak, so the signal resides in rates and spreads rather than stocks. For global allocators, Tunisia behaves as a higher-beta North African credit with domestic financing dependence and reform optionality; the industrial investment uptick is credible but not yet self-financing.

Forward risks and verification metrics are clear. The investment pulse will translate into durable output only if three conditions hold through 2026: headline inflation sustains at or below 5% quarter average; the policy rate eases by 50–100 basis points without destabilising the dinar; and the current account remains contained within a 2–3% of GDP deficit band as euro-area demand stabilises.

Under that configuration, declared industrial investment could rise toward TND 1.8–1.9 billion in calendar 2026, lifting the ratio marginally above 1.0% of GDP and supporting real GDP growth of about 2.5–2.7%. If reserves fall below 90 import days or USD spreads re-widen above 800 basis points, the funding mix would tilt further to domestic sources, raising crowding-out risk and stalling private capex. The next twelve months will test whether Tunisia’s targeted industrial policy and disinflation can compress risk premia fast enough to unlock external capital and turn a narrow uptick into a broader investment cycle.