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Economy of Algeria
Posted by khethiwe qotyana on 26 March 2018, 13:25 SAST
n 2014, the Algerian economy expanded by 4%, up from 2.8% in 2013. Growth was driven mainly by the recovering oil and gas sector and further economic expansion of 3.9% is forecast in 2015 and 4.0% in 2016.
In 2012, the Algerian economy grew by 2.5%, up slightly from 2.4% in 2011. Excluding hydrocarbons, growth has been estimated at 5.8% (up from 5.7% in 2011). Inflation is increasing and is estimated at 8.9% (up from 4.49% in 2011). Despite the financial authorities’ good performance, thanks to modernisation reforms, the budget deficit widened to 3.3% of GDP in 2012 (as against 1.3% in 2011) due to the continuation of the expansionary fiscal policy initiated in 2011 to meet strong social demands in terms of purchasing power, jobs and housing. The oil and gas sector is the country’s main source of revenues, generated about 70% of total budget receipts. The economy is projected to grow by 3.2% in 2013 and by 4.0% in 2014. The country’s external position remained comfortable in 2012, with a trade surplus of about USD 27.18 billion. The current-account surplus is estimated at 8.2% of GDP and official foreign-exchange reserves have been estimated at USD 190.7 billion at end-December 2012, or the equivalent of more than three years of imports of non-factor goods and services. Oil and gas export earnings made up more than 97% of total exports.
Algeria has enormous possibilities to boost its economic growth, including huge foreign-exchange reserves derived from oil and gas. A development strategy targeting stronger, sustained growth would create more jobs, especially for young people, and alleviate the housing shortage the country is facing. The national strategic option is therefore to revitalise the process intended to diversify the economy starting with the non-oil sector while deepening the reforms needed for the structural transformation of the economy.
