Rising manufacturing output offset subdued services contribution and shrinking agriculture sector, lifting Tunisia’s GDP growth to a still anchored 1.0% y/y in the first quarter of the year from a 0.3% annual expansion in Q4 2015, the statistics office INS said in a preliminary estimate. In quarterly terms, the GDP grew 0.4% in Q1.

The reading, despite being relatively optimistic, confirms the central bank concerns about economic growth this year. The c-bank is desperately seeking to lure further FDI, spur lending and consequently GDP growth. To achieve this, Tunisia’s central bank has kept the benchmark interest rate at 4.25% at its latest MPC sitting, seeking to reignite the tumbling GDP growth amid slowing CPI inflation and contracting industrial output.

The EBRD forecasts 1.6% GDP growth in 2016, accelerating from just 0.8% last year.

Falling olive oil output (down 60% y/y in Q1) cut Tunisia’s agro sector--and main job generator--by 2.5% y/y during the quarter. The manufacturing sector, however, expanded 1.4% y/y in Q1 on growing chemicals output (up 29% y/y), construction (up 4.2% y/y), mechanical and electrical equipment (up 1.7%) and textiles (up 0.7%).

The services sector rose 1% y/y in Q1 mainly on higher output in the telecoms sector (up 5.1% y/y), financial services (up 3.8%) and transport (up 1.3% y/y in Q1). As to the value-added tourism sector, it shrank 12% y/y in Q1 as it failed to recover from the impact of the terrorist attacks that too place in 2015.