Tunisia's economy will expand less quickly than hoped this year, with GDP growth now forecast at 3.6 per cent compared to 4 per cent previously, its finance minister said, putting partial blame on slower growth in Europe.

The budget deficit in the North African state is also projected to be wider than expected at 7.4 per cent of GDP compared to the earlier estimate of 5.1 per cent, Elyess Fakhfakh said.

He added that he expected total debt to reach 48 per cent of GDP this year from 46 per cent previously expected and warned it could rise to 52 per cent if salaries continue to go up.

Fakhfakh cited slower economic growth in Europe and higher Tunisian government spending for the revised estimates. He did not mention the political crisis that has paralysed the government in Tunis for a month.

Tunisia last month slid into its worst political crisis since the overthrow of president Zine El Abidine Ben Ali in January 2011. Government and opposition leaders are trying to find a negotiated way out of the deadlock.

"As a result of the continuing crisis in Europe, Tunisia has revised its growth forecast again from 4 per cent to 3.6 per cent," the minister said.

The Islamist-led government cut its forecast for full-year 2013 growth in April to 4 per cent from 4.5 per cent. Tunisia, which has signed a $1.7 billion standby loan agreement with the International Monetary Fund, is struggling with rising inflation and a large external deficit as well as its uncertain political outlook.-Reuters