Rising value-added exports, mainly olive oil and durable goods, and falling energy imports, continue to support Tunisia’s external position with the trade deficit narrowing 17.4% y/y to TND4.691bn ($2.4bn) in the first five months of the year, data from the statistics office showed. Exports grew 4.0% y/y to TND12bn whereas imports fell 3.1% y/y to TND16.7bn during the period.

Tunisia’s current account (CA) gap contracted 24% y/y to TND2.161bn ($1.1bn) in the first four months of the year as sharply narrowing trade gap offset a decrease in the services income surplus due to weak tourism activity, data from the central bank recently showed. The CA deficit reached 2.4% of the forecast GDP at end-April, down from 3.5% of GDP the year before.

The exports to imports ratio improved to 71.9% at end-May from 67.0% the year before.

Exports of food and agriculture products jumped 123% y/y at end-May amid soaring value-added oil olive foreign sales (up to TND1.142bn at end-May from just TND126mn the year before). The low prior-year base will keep boosting agriculture exports at least in the first half of 2015. Exports of mechanical and electrical appliances increased for the fifth straight month in May (up 6.8% y/y) on recovering EU demand after a period of stagnation. This is good news for the government eagerly seeking to boost value-added exports and consequently industrial output and GDP growth.

Exports, however, remained undermined by a 40% y/y drop in energy sales on falling oil prices, a 36% annual contraction in phosphates exports amid lower output and a 5.2% drop in sales of textiles.

Imports were pushed down by 19% y/y drop in energy purchases amid declining crude oil prices despite rising local demand. Food imports, however, increased 10% y/y amid higher wheat purchases. Imports of passenger cars climbed 14.7% y/y during the period reflecting strong consumer demand for durable goods and recovering confidence.