The Tunisian economy is dominated by fossil fuel production, mining, manufacturing, and tourism. In 1998 the government’s budget showed $5.8 billion in revenue and $6.3 billion in spending. The gross domestic product (GDP), which is the total value of all goods and services produced in the country, was $20.9 billion in 1999. Tunisia has a mixed economy in which both the public and private sectors participate. Services, agriculture, light industries, and the production and export of petroleum and phosphates are the largest sectors of the economy. Unemployment and underemployment are widespread, and economic development has been heavily subsidized by Western countries and international organizations. The gross national product (GNP) is growing faster than the population; the GNP per capita is among the highest in Africa but is low for the Middle East and North Africa.

Private agriculture has traditionally been the mainstay of Tunisia's economy, though the manufacturing sector has assumed a larger place in the economy in recent decades. Agriculture accounts for less than one-fifth of the gross domestic product (GDP) and employs almost one-fourth of the work force. Tunisian agriculture remains plagued by the country's uncertain rainfall patterns, and the size of its harvests varies as a result. Dry farming predominates, though an ambitious water development program begun in the 1980s has greatly increased the country's irrigated acreage.

Tunisia has a diverse economy, with important agricultural, mining, energy, tourism, and manufacturing sectors. Governmental control of economic affairs while still heavy has gradually lessened over the past decade with increasing privatization, simplification of the tax structure, and a prudent approach to debt. Real growth averaged 5.5% in the past four years, and inflation is slowing. Growth in tourism and increased trade have been key elements in this steady growth. Tunisia's association agreement with the European Union entered into force on 1 March 1998, the first such accord between the EU and Mediterranean countries to be activated. Under the agreement Tunisia will gradually remove barriers to trade with the EU over the next decade. Broader privatization, further liberalization of the investment code to increase foreign investment, and improvements in government efficiency are among the challenges for the future.