Tunisia’s economy is expected to grow by 1 per cent in 2011, following a year of political unrest.

Planning and International Cooperation Minister, Abdelhamid Triki says the economy is already showing signs of growth, although many areas of Tunisia’s economy are struggling since the collapse of the former regime of President Zine el-Abiding Ben Ali in January.

In the first seven months of the year, oil production has fallen 14.4 per cent, electricity and phosphates production declined 54 per cent, tourism levels fell 47 per cent, while cement production has increased 6.4 per cent.

Foreign investment in Tunisia has dropped by 26 per cent in the first seven months of 2011, reaching TD868.4m ($626m). However, 98 international companies have re-entered growth phases and 136 companies have expanded during the first seven months, creating 6,720 jobs.

Triki also says the state has allocated TD1.6bn of external funding to stimulate economic recovery and growth.

Unemployment remains the major challenge for the interim government, with 650,000 unemployed citizens. An additional 70,000 citizens have returned from Libya. Triki says the government will create 16,000 permanent jobs in the public sector in 2011. Despite this, the unemployment rate is expected to rise to 16.3 per cent this year, compared with 13.3 per cent in 2010.

The external payment balance deficit will hit 5.7 per cent by the end of 2011 and will lead to a state budget deficit of 5.1% for the coming year, increasing the need for an additional TD3.5bn in external funding, says Triki.