Key facts
- The Central Bank of Tunisia (BCT) kept its key interest rate unchanged at 7.0%.
- Headline CPI growth accelerated to 5.5% y/y in April.
- GDP expanded by 2.6% y/y in Q1.
- Current account deficit narrowed to 1.5% of GDP in Jan-Apr.
- Foreign exchange reserves improved to 104 days of imports.
The Central Bank of Tunisia (BCT) decided to keep its key interest rate unchanged at 7.0% during its board meeting on Wednesday. This decision reflects a prudent policy stance amidst rising domestic inflation and significant global risks, particularly geopolitical tensions in the Middle East impacting commodity and food markets. While domestic inflation is relatively contained, headline CPI growth accelerated to 5.5% year-on-year in April, driven by a sharp increase in fresh food prices. Core inflation also edged up to 5.0%.
Economic growth showed resilience, with GDP expanding by 2.6% year-on-year in the first quarter of 2026, slightly below the previous quarter but significantly higher than the 1.6% growth recorded a year ago. Services, agriculture, and parts of industry supported this expansion, though the construction sector continued to be a drag.
The external position improved, with the current account deficit narrowing to 1.5% of GDP in January-April from 1.7% a year prior. This improvement was driven by stronger services receipts and remittances, which compensated for a wider trade deficit largely due to higher energy costs. Excluding energy, the current account posted a surplus of TND 1.46 billion. Foreign exchange reserves increased to TND 25.5 billion, covering 104 days of imports as of June 2, up from 98 days a year earlier. The BCT indicated that while no immediate further tightening is planned, it remains vigilant about increasing external inflationary pressures and their potential pass-through to domestic prices. The bank stated its readiness to implement appropriate measures based on the inflation outlook.