This country profile was published in November 2008 in our annual 'Africa in 2009' issue. The next edition, 'Africa in 2010' will be on sale 23 November 2009.

Click on the drop-down menu above to see Tunisia's Top Companies and Top Banks.

A well-oiled economic machine and strong fundamentals will see Tunisia through what could well be a tough 2009, given the predicted EU downturn. With the Eurozone buying three-quarters of its exports, forecasts of real GDP growth above 5% in 2008 and 2009 may prove hard to live up to. The country, like nearby Morocco, has managed to avoid the fall out from cheap Asian textiles by focusing on European short-order 'fast fashion' retailers like Zara and H&M, but this success may falter if consumers in the EU start shopping less.

A similar process may occur in the automobile, aeronautical and electrical engineering sectors, where Tunisia has been successfully attracting outsourcing from Airbus and Mercedes. The determination to integrate into global supply chains is paying off, and even if it may take a temporary hit during a downturn, the long-term outlook for the economy is good. Helping the improved integration are large infrastructure projects, focused on telecoms and transport. A new deep-water port and an airport are opening in Enfidha later in 2009.

The growing and stable middle class is driving the economy, with household consumption making up 65% of GDP in 2006. Call-centre and ICT development parks have been targeted as a good way to tackle unemployment. The service sector is booming, especially tourism, which employs over a third of the working population and is an important source of foreign exchange.

More problematic is a sluggishness in sections of the private sector, linked to the slow pace of privatisation and bank reform. The World Bank's Doing Business rankings place Tunisia's business climate 88th out of 178 countries, but for categories like employing workers (113th) and protecting investors (147th) there is still a way to go. Bad debt in the banks has been coming down, with a target of 15% for 2009 - still fairly high, but moving in the right direction.

Presidential elections in 2009 will hold no surprises. President Zine El Abidine Ben Ali, 72, should get a fifth and perhaps final mandate. The appointment of a number two to the regime, for the first time in 20 years, alongside a partial cabinet reshuffle in August and the re-composition of the ruling Rassemblement Constitutionnel Démocratique's (RCD) political bureau a few days later, may raise hopes of greater political openness in the future. The fact that the new regime second-in-command is long-serving Prime Minister Mohamed Ghannouchi will reassure those who prefer continuity.

Rising stars can be found in the next generation, such as Slim Tlatli and Nouri Jouini. Tlatli, previously in charge of the presidential oversight committee for Gulf investors in Tunisia, is labour minister, a key sector given stubborn unemployment. Jouini, in charge of privatisation programmes until 2002, is now international cooperation minister. But there are not many politicians in the country who have any weight or popular following, President Ben Ali preferring to surround himself with technocrats.

A plan to allow opposition presidential candidates to stand in the October 2009 elections has been received with scepticism by those pressing for greater political reform; the plan effectively limits candidature to those who can gain support from within the ruling RCD party (where disloyalty to the president is not encouraged). The government has stuck to its tough line on radical Islamists and still limits free debate in the media.