The recovery continues in a difficult environment. The recovery has proceeded broadly as expected in the Third Review, notwithstanding elevated socio-political tensions and a further increase in oil prices. Growth accelerated to 2.8 percent in the second quarter driven by agriculture and tourism, inflation decelerated to 7.5 percent in August, and the current account deficit for the first half of the year improved by one percent of GDP. However, investment remains weak, unemployment is high especially among the youth and women, and the Tunisians’ purchasing power is eroding. The fiscal deficit at end-July was lower than expected, reflecting the 2018 tax package and improved collection. The authorities met all Quantitative Performance Criteria and implemented two out of the three Structural Benchmarks due for the Fourth Review, notably the competitive central bank foreign exchange auctions.