Drought is often presented as a drama of cracked fields and dry dams. Simulations of a Tunisian macroeconomic model describe it differently: as a delayed balance-of-payments shock.
By 2050, climate inaction could shave 4% to 11% off nominal GDP, destroy 216,000 agricultural jobs, and push unemployment beyond 17%. Even more troubling, the adaptation bill, if poorly designed, could produce almost the same financial disaster as inaction.
A climate shock settled in currencies
The mechanism is relentlessly logical. Less rainfall means fewer dates and olive oil to export, while domestic demand continues to grow with the population. To bridge the gap, the country imports more.
The trade deficit would reach between 10.4% and 13.7% of GDP in 2050, compared with 8.9% under the baseline trajectory. The current account deficit would widen to 7.3% or 11% of GDP depending on the assumed global food inflation. The state, forced to borrow in foreign currencies, would see its currency depreciate and inflation accelerate.
These projections come from the study dedicated to the GEMMES Tunisia model, conducted by the Tunisian Institute of Competitiveness and Quantitative Studies (ITCEQ) in cooperation with the French Development Agency. The model links the real economy, currency, and finance within a framework known as a stock-flow coherent model.
It is fed by FAO projections and the Adapt’Action study. Two variants of a severe climate scenario are compared to the baseline trajectory, which extends agricultural growth of 1.2% per year: one with global food inflation at 3%, the other at 5.5%. The higher the world price of food climbs, the heavier the Tunisian bill, as the war in Ukraine has already shown.
Rural employment, the first link to give way
The agricultural contraction, with an annual production decline of 0.5%, would first be felt in jobs. The 216,000 destroyed positions would fuel an exodus to cities and faster urbanization than expected.
The unemployment rate would stabilize above 15% in the moderate variant and exceed 17% in the severe variant. The fiscal mechanism follows: lower tax revenues, more social transfers, and a public debt that would reach levels deemed alarming by the study.
The trap of imported concrete
