Consumers in Tunisia feel the bite of oil price hikes.

Tunisia is well regarded by the international financial press for its macroeconomic stability. From the average annual growth of the country's per capita income for the past decade at 5.9 percent-based on International Monetary Fund (IMF) statistics and including an estimate for 2007-it would appear that Tunisia's consumers are participating in the country's economic growth.

The per capita number is all the more significant because Tunisia's average annual growth in GDP for the past decade is 5.0 percent. Per capita growth exceeds this figure by nearly 1.0 percent. In fact, for every year of the past decade, with the exception of 1998, per capita income growth was higher than GDP growth.

The graph above, though, gives two reasons to cast doubt on the seeming favorable situation of the country's consumers. The chart plots price pressure-not necessarily a measure of how consumers are spending their money. Two of the several consumer price indexes (CPI) maintained by Tunisia's Institut National de la Statistique. The line in dark red is the overall index and the line in yellow tracks prices for leisure related products and services.

Note, first of all, that after a decline in the first few months of 2004, the overall price index grew slowly until June 2004 when it appeared to reach a plateau. The CPI line stays flat all the way until March 2005, spikes then declines slightly before resuming a steep upward track.

The yellow line, representing leisure expenses, follows a similar course. From an unexciting 2004 start, leisure expenses are nearly parallel with the overall CPI, with the exception of the lack of a spike starting in March 2005. The parallel course stops in October 2005 when the growth in the leisure expenses index begins to falter.

During the first quarter 2006, the overall CPI ascends even more steeply, and by April 2006, when both...

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