What Tunisia’s Widening Trade Deficit Means for Sovereign Risk

Tunisia’s trade deficit widened by 22% to 17.8 billion dinars in just the first eight months of 2026. That deterioration arrived in the same year the phosphate sector’s export recovery, the one genuine bright spot of 2025, went into reverse.

The figures came from Tunisia’s National Institute of Statistics (INS) on 12 September 2026, and they are not a single-quarter anomaly. They mark the continuation of a gap that widened progressively through 2025, now losing the partial cushion that phosphate’s rebound had briefly provided.

This piece maps the structural forces behind that widening gap, what the phosphate sector’s reversal reveals about Tunisia’s underlying export capacity, and why the absence of an IMF anchor amplifies every number in the trade data for anyone assessing North African sovereign risk.

A deficit that keeps widening: what the latest INS data actually shows

The headline number is easy to read in isolation. The trajectory behind it is what matters.

The core figure Tunisia’s trade deficit hit 17.85 billion dinars, roughly US$6.1 billion, at the end of August 2026, up from 14.64 billion dinars a year earlier. That is a 22% widening in twelve months.

To understand why that figure should not surprise anyone tracking the data, walk back through 2025. The deterioration built quarter by quarter, and each step made the next one predictable.

In the first quarter of 2025, the deficit reached roughly 5 billion dinars, up around two-thirds year-on-year, as exports fell and energy import pressures held firm. By mid-year the gap had reached approximately 9.9 billion dinars, a 23.5% rise driven by higher imports of equipment and raw materials against broadly flat exports. By the end of October 2025 it peaked near 18.4 billion dinars, about US$6.3 billion.

Neither side of the ledger explains the gap on its own. Imports over January-August 2026 climbed to 62.52 billion dinars from 56.01 billion a year earlier, while exports grew more slowly, to 44.67 billion dinars from 41.3 billion. Both rose. The imports simply rose faster and from a higher base.

The INS foreign trade statistics for January-August 2026 confirm that both sides of the ledger grew, but imports expanded from a higher base and at a faster rate, compressing the export coverage ratio further than at any comparable point in recent years.

The World Bank had already flagged the direction, noting the merchandise trade deficit widened 10.9% in 2024 and stayed near 11.4% of GDP.

What the consistent 22-24% pace tells you is that this is structural, not cyclical. Import dependency is entrenched, and export growth is not fast enough to close the gap. For anyone weighing Tunisia’s external financing needs over the coming year, that baseline is where the analysis has to start.

Why phosphate exports are falling again after last year’s recovery

Phosphate was supposed to be the story that improved. Mining, phosphate, and derivatives exports contracted 12% year-on-year over January-August 2026, reversing a 15% full-year export gain in 2025 and following a 26.3% contraction in 2024. The sector has swung without ever settling into a trend.

The phosphate industry revival narrative that shaped investor expectations through 2025 rested on a single year of production gains, without resolving the governance, infrastructure, and labour instability in the Gafsa basin that have capped every previous recovery.

The 2025 recovery was real while it lasted. Higher international fertiliser prices helped, and domestic production improved sharply, with crude phosphate output in the third quarter of 2025 reaching 907,000 tonnes, a 48.3% jump year-on-year. According to CPG management in a March 2026 statement, the Compagnie des Phosphates de Gafsa produced roughly 3.9 million tonnes of commercial phosphate for the full year, about a 28% increase.

Here is where the recovery narrative breaks. That 3.9 million tonne result fell well short of CPG’s own 5.0-5.3 million tonne target for the year. National output, on USGS-based estimates, sat at around 3.3 million metric tonnes. Pre-2011 national output ran near 8 million tonnes per year. The rebound, however genuine, left the sector operating at less than half its former capacity.

The government’s ambition points far higher still: 5.3-5.5 million tonnes annually from 2026 onwards, and 14 million tonnes by 2030. A sector that missed a 5.3-million-tonne target by 1.4 million tonnes, after more than a decade of structural neglect, is not on a credible path to quadruple output within four years. Treat the 2030 target as aspirational rather than operational.

The structural constraints that cap every recovery

The reason gains reverse so quickly comes down to three constraints, each documented rather than assumed:

1. Governance and social unrest in the Gafsa basin. Oxford Business Group analysis, citing CPG data, links a 40-50% fall in phosphate production between 2010 and 2017 to instability, strikes, and blockades by unemployed youth in the mining region.
2. Ageing infrastructure and underinvestment. Chronic neglect of extraction equipment and the rail wagons that move ore to processing plants remains a binding limit, with the GCT-operated Mezzouna plant staying closed and cutting the capacity to convert raw phosphate into higher-value exports.
3. The absence of a coherent strategic vision. An August 2024 sector commentary attributed the underperformance to a lack of strategic planning, bureaucracy, corruption, and successive governments’ failures rather than any shortage of the resource itself.

CPG management corroborated the second point directly, acknowledging that 2025 output was held back by outdated equipment. When the constraints are governance, infrastructure, and planning rather than geology or demand, production gains stay fragile because none of the underlying causes has been fixed.

The import side of the ledger and Tunisia’s deepening external dependencies

The export shortfall is only half the story. The deficit is not only a problem of what Tunisia struggles to sell, but of what it cannot stop buying.

Energy and food imports dominate the import structure. The energy deficit accounts for the bulk of the merchandise trade gap, which means that when global energy prices rise, the deficit widens regardless of how phosphate or manufacturing exports perform. That is the mechanism turning a cyclical dip into a structural trap.

The sourcing map is shifting too. Import shares from China, Turkey, and India have risen, while shares from Russia and the United Kingdom have fallen, reflecting both supply-chain diversification and changing pricing dynamics.

The EU sits on both sides of the trade book and dominates both. It absorbed 70.2% of Tunisia’s exports over January-August 2026, led by France, Italy, Germany, and Bulgaria, while supplying 45.1% of imports. That export concentration is a genuine risk: a growth slowdown in France, Italy, or Germany would pressure Tunisia’s export revenues directly, with no diversified buyer base to soften the blow.

Financing the gap without an IMF anchor Tunisia has turned to the International Islamic Trade Finance Corporation (ITFC) for a US$1.2 billion, three-year facility to finance energy imports, a concrete illustration of the costlier, shorter-term financing it relies on in the absence of an IMF programme.

The reliance on facilities like the ITFC line tells you how little structural buffer exists. A further energy price shock would land on a country that has to borrow, at a premium, simply to keep the lights on.

Stalled IMF talks, speculative-grade ratings, and the financing gap behind the numbers

The trade numbers are not just an economic outcome. They reflect deliberate political choices about reform, and the clearest of those choices concerns the IMF.

On 15 October 2022, the IMF announced a staff-level agreement with Tunisia for a US$1.9 billion Extended Fund Facility over 48 months. The Executive Board never approved it. Negotiations have been stalled since 2023, and no new IMF mission or programme update had emerged through September 2026.

The block is political. President Kais Saied has publicly rejected the conditionality attached to the facility, including subsidy cuts and public-sector wage reform, framing them as unacceptable. That is a legitimate sovereign choice, but it carries a direct economic price: without an IMF anchor, Tunisia’s access to external financing is costlier, shorter in tenor, and less credible to markets.

IMF programme access remains the clearest differentiator between sovereign borrowers in the region: Niger’s recently secured $91 million facility illustrates the financing and credibility advantages that flow from an active programme, advantages that Tunisia’s stalled talks have kept out of reach since 2023.

The sovereign ratings show the cost of that credibility gap:

• Fitch: B- with a Stable Outlook, affirmed 8 September 2026, with a Recovery Rating of RR4 signalling only average recovery prospects in a default scenario.
• Moody’s: Caa1 with a Stable Outlook, as of February 2025.

Both keep Tunisia firmly in speculative-grade territory, and the country has been locked out of foreign-currency bond markets since 2019. External debt stood at roughly US$40.46 billion in 2024, with short-term external debt of about US$15.93 billion, a figure that captures the scale of near-term rollover risk.

Put those pieces together. A sovereign rated B- and Caa1, with no IMF programme and nearly US$16 billion in short-term external debt, has very limited room to absorb further trade deterioration before a financing crunch becomes the live risk. That is the context in which every phosphate export shortfall and every energy import surge should be read.

Slowing growth and constrained fiscal space

The growth backdrop offers no rescue. GDP expanded 2.6% year-on-year in the first quarter of 2026, then eased to 2.3% in the second. That momentum is nowhere near enough to generate the export growth needed to close the trade gap.

The World Bank and EBRD point to a self-reinforcing constraint: high public debt crowds out private investment, holds growth near 2%, and erodes the tax base that would otherwise help stabilise the debt. Slow growth feeds weak public finances, which feed slow growth.

What the deficit trajectory tells you about Tunisia’s next 12 months

Strip away the individual data points and three variables will decide whether the trade deficit stabilises or widens over the next year. Each currently faces a headwind.

• Phosphate export performance. The evidence is a 12% contraction over January-August 2026 and a long record of missed production targets. The directional risk is that structural constraints keep output volatile, leaving no dependable export tailwind.
• Global energy prices. Energy remains the dominant driver of import costs for a net energy importer. The directional risk is asymmetric: any price spike widens the deficit directly, with no domestic supply to cushion it.
• IMF negotiations. Talks have shown no sign of resuming through September 2026. The directional risk is that continued political rejection of conditionality keeps the cheapest external financing anchor off the table.

Ambition versus reality The government targets 14 million tonnes of phosphate production by 2030. Actual 2025 output was roughly 3.9 million tonnes. Closing that gap means quadrupling output within four years, against constraints that have capped every recovery to date.

Read the sovereign ratings as a lagging indicator, not a leading one. The B- and Caa1 grades describe conditions that already exist. The forward risk is that further trade deterioration or a financing shock pushes those ratings lower before any structural reform can take hold. The RR4 recovery rating, signalling only average recovery in a default scenario, offers little comfort on the downside.

For investors monitoring North African commodity exporters, Tunisia currently combines structural commodity underperformance, constrained sovereign financing, and stalled reform. That combination makes a near-term improvement in the trade balance unlikely without a policy shift that is not yet visible.

North African debt dynamics sit within a continent-wide stress pattern where improving credit ratings coexist with a $90 billion aggregate debt challenge, a combination that makes individual country trajectories, including Tunisia’s, harder to read in isolation.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions. Past performance does not guarantee future results, and financial projections are subject to market conditions and various risk factors.