Algeria Bent To Lose $ 47 Billion Dollars Within Next 36 Months!

Algeria’s foreign currency reserves will erode within the next three years to reach less than $ 34 billion dollars, according to predictions made by finance Minister Abderrahmane Raouia.

“The exchange currency reserves will shrink to $ 62 billion in the coming year. They will continue to erode to $ 47.8 billion in 2020 and reach $ 34 billion in 2021 and to the extent of 33.8 billion dollars, and thus Algeria will lose about 47 billion dollars of foreign currency reserves to be spent during this upcoming period”, the Minister noted.

On Sunday, the National People’s Assembly (APN) resumed its official activity at the level of the committees by receiving the Finance Minister Mr. Abderrahmane Raouia who seized the opportunity of this encounter with the MPs to expound the ins and outs of the country’s finance bill for the coming year.

The Minister thus shed light on the draft finance law for next year to the members of the Finance and Budget Committee at the APN representing the sectors the sectors of industry, construction, public works, housing, agriculture and commercial and non-commercial services.

According to Mr. Raouia, the draft finance law is geared to spurring growth as early as next year despite the volatility of the hydrocarbons sector, which has witnessed of late improved oil prices reaching the threshold of $ 80 dollars a barrel.

As a result, the country’s total foreign currency reserves are likely to reach around $ 34 billion dollars.

He pointed out to the members of the Finance Committee that he expects the period between 2019-2021 to witness a continuous decline in balance of payments to drop from $ 17.2 billion next year to $ 14.2 billion in 2020 and then to $ 14 billion in 2021.

For his part, the Minister of Relations with Parliament Mr. Mahjoub Bada said that the next finance bill expects a hike in growth of about 3 percent, compared with growth of 3 percent in non-hydrocarbons sector, and 1 percent decrease in hydrocarbon exports in terms of volume, while revenues are expected to grow to $ 33.2 billion dollars in 2019.

Non-hydrocarbon growth is expected to grow by volume, with construction, public works and housing contributing at a rate of about 4.7 percent, industry 5 percent, agriculture 3.7 percent, commercial services 4 percent, and non-commercial services at a rate of 1.8 percent.

“Echorouk” has already tackled the relevant file in its previous issues, noting that the finance draft law was worked out on the basis of a reference price of Algeria’s oil barrel Sahara Blend, setting it at $ 50 dollars a barrel and based on a market price of $ 60 dollars per barrel.

The exchange rate of the Algerian currency the Dinar against the Dollar is expected to be set at $ 118 for the period between 2019 and 2021 while the inflation rate is foreseen to reach 4.5 percent in 2019, 3.9 percent in 2020 and 3.5 percent in 2021.

Medium-term economic growth is foreseen to hike to reach 3.4 percent by the year 2020, with an average of 1.3 percent growth outside of hydrocarbons, and fuel exports are expected to attain 4.2 percent by 2020, with projected hard currency revenues reaching around $ 34.5 billion dollars.

The finance bill also predicts that imports of goods will plummet to $ 44 billion in 2019, to $ 24.9 billion in 2020 and to $ 41.8 billion in 2021.

This will make the trade balance deficit gradually slow down to shift from $ 10.4 billion in 2019 to $ 8.2 billion in 2020 and down to $ 6.4 billion in 2021.

The Minister further stated that the draft finance law for the coming year is in general a continuation of the efforts of the state to mitigate the negative effects of the contraction of financial resources on the national economy in a context characterized by stiff tensions on the country’s internal and external balances as a result of the slump of world oil prices.