Tunisia’s olive oil export boom helps country ease debt burden…for now

Tunisian olive oil exports hit a record high in 2023 and are on track to top another record this year giving the country’s beleaguered economy a desperately needed boost to keep the threat of default at bay.

In the first half of the export year that ended in April, revenue from olive oil exports almost doubled to about $1.1 billion, according to a report in Bloomberg citing Tunisia’s olive oil agency. That amount far surpasses revenue from tourism and Tunisia’s phosphate and fertilizer industry.

The increase in revenue helped Tunisia lower its current-account balance from 9% in 2022 to 2.5% of GDP last year, according to the International Monetary Fund (IMF).

Nevertheless, Tunisia’s debt burdens remain exceedingly high. The country is estimated to need roughly $8 billion this year just to service foreign debt, according to Bloomberg.

President Kais Saied recently rebuffed the IMF’s $1.9 billion bailout loan that requires the country to cut subsidies for food and energy. He is instead leaning on his central bank to fund debt repayments and cover government costs. The sustainability of this strategy is in question. 

For the moment, olive oil exports are helping Tunisia stay afloat but without the help of the IMF, it’s unclear how long Tunisia can avoid a default.