Tunis - Unemployment in Tunisia fell to 16.7 percent at the end of 2012 from 18.9 prcent in 2011, the State Institute of Statistics said on Thursday, following a rise in foreign investment.

Job creation one of the Islamist-led government's greatest challenge two years after a popular uprising toppled former leader Zine al-Abidine Ben Ali.

Frequent protests over unemployment have taken place in recent months.

The statistics institute said 653,000 people were out of work in the fourth quarter of 2012, a decline of 0.3 percent from the previous quarter.

Foreign direct investment rose to 2.9 billion dinars ($1.87 billion) in 2012 from 1.6 billion dinars in 2011, the State Foreign Investment Agency said. - Reuters