Tunisia Trade Gap Shows Structural Exposure

Tunisia’s trade deficit reached TND 16.7 billion by end-September 2025, up 24% year on year, with the energy balance at TND 8.1 billion and contributing roughly 48% of the gap. The configuration elevates global oil benchmarks and the dinar into primary macro transmission channels. Brent (BZ=F) tracking the mid-USD 80s and flat domestic hydrocarbons output have lifted the import bill just as the exchange rate averages roughly 2.90–2.94 per USD (TND=X) in October, sharpening imported inflation risk. With net FX assets near TND 25.4 billion—about 110 days of goods and services imports—the buffer is adequate for routine seasonality but thin for a prolonged price shock or funding squeeze.

Growth remains subdued at an estimated 2.0–2.6% for 2025, below the 4% pace associated with debt stabilization. Headline CPI has decelerated toward 5% as of September from peaks above 9% in 2023, but the pass-through from energy and FX leaves little margin for policy missteps. The Central Bank of Tunisia holds the key rate at 7.5% after a March cut, balancing disinflation progress against FX stability. Public debt sits in the low- to mid-80s percent of GDP, with a material foreign-currency share that keeps the sovereign balance sheet exposed to oil-and-FX swings. Banks—already managing elevated non-performing loans—continue to absorb government paper at modest nominal yields that are negative in real terms, constraining credit to the tradables sector.

The mechanics are direct. On the fiscal line, administered fuel prices and state-owned utility cash needs lift primary-deficit sensitivity to oil: a 10% gain in Brent raises the deficit by several tenths of a percent of GDP absent offsetting measures. On prices, the CPI pass-through steepens when TND weakens, risking a renewed inflation impulse that would limit room for further rate normalization. On funding, higher external rollover costs drive a heavier tilt toward the domestic bid, crowding out private investment and tightening financial conditions even without additional policy hikes. Diaspora transfers and tourism receipts, which together exceeded TND 12 billion by late Q3, provide a partial cushion but cannot fully offset energy-weighted outflows.

Market pricing aligns with this macro map. USD bonds across the 2026–2029 sector trade at mid-teens yields, implying default-adjusted spreads well above 1,000 basis points over the U.S. 10-year (^TNX). The curve’s level and slope embed not only near-term liquidity concerns but also an execution discount on structural reform. Regional peers highlight the differential: Morocco’s currency pair (USDMAD=X) and local rates have been steadier through 2025, reflecting a lower energy-import beta and stronger policy signaling. In EM hard-currency space, broad beta proxies such as EMB have tightened year to date, underscoring that Tunisia’s risk premium is idiosyncratic rather than simply cyclical.

Policy sequencing, not proclamations, will determine whether the premium compresses. First, a subsidy-rationalization path with automatic adjustment bands tied to world prices (BZ=F, CL=F) and targeted transfers to protect real incomes would reduce quasi-fiscal leakage and anchor inflation expectations. Second, a time-bound utility balance-sheet repair and ring-fenced capex envelope for renewables to raise commissioned capacity, lower gas and oil import needs, and cut the energy share of the trade deficit. Third, export-mix upgrades in mechanical, electrical, and phosphate-derivative lines to widen non-energy FX earnings. Each lever requires dated milestones, a quarterly disclosure dashboard, and coordination with program anchors to restore credibility.

The signal from the energy-weighted trade deficit is regime-level, not cyclical. If by end-2026 Tunisia narrows the current account by 1–1.5 percentage points of GDP, lifts reserves toward four months of imports, holds CPI in a 4.5–5.5% band, and reduces the energy share of the trade gap from ~48% to the low-40s, sovereign USD yields could compress by 300–400 basis points, the dinar could trade inside a 2.85–3.05 per USD corridor (TND=X), and domestic funding costs could ease sufficiently to re-open duration.

Failure to execute implies persistence of a high-beta oil-and-FX loop into 2027: every upswing in Brent widens the deficit, weakens the currency, forces heavier local issuance, and embeds a higher neutral rate—eroding growth and delaying market re-entry.