Tourism and hospitality are vital to the Tunisian economy. Instability in recent years has posed significant challenges but the sector appears to be on the road to recovery. In 2015, ISIS attacks in Sousse and Tunis killed 60 people. The majority of the victims were European tourists. The attacks took a heavy toll on the country’s tourism sector, which accounts for around one-sixth of GDP and provides employment for more than 200,000 people. Visitor numbers fell by 25% to 5.4 million in 2015, and revenue from tourists dropped by 35% to US$ 1.1 bn. Mass unemployment and business closures ravaged the resorts. However, things are looking up. The latest figures from the National Office of Tunisian Tourism (ONTT) show 3.6 million visitors to 31 July 2017, a 27% increase year-on-year. The rise is helping the government weather an economic crisis as it prepares an austere budget and tax increases. The reforms were agreed with the International Monetary Fund in return for a new US$ 350 mn loan.
Growth in the Tunisian economy is set for a slower trajectory than previously hoped. The October 2017 world economic outlook from the International Monetary Fund cut the outlook for growth in each of the four years from 2017. The economy is now expected to post 2.3% growth in 2017 rather than 2.5% as forecast six months earlier. Growth for the following three years is 3.0% (3.1%), 3.5% (3.7%) and 4.1%, (4.2%). Official data had already showed that the economy had slowed in the second quarter of the year, indicating that the road to recovery remained bumpy. Annualised GDP growth slowed to 1.8% in the three months to June 2017 from 2.1% in the previous quarter but still up from the recent trough of 1.1%. The economy grew by 1.0% in 2016 and 1.1% in 2015. In May 2017, Fitch Ratings raised its growth forecasts to 2.3% for 2017 from 2% previously and forecast growth of 2.5% in 2018.