Algeria Is Safe From Debt, Exchange Reserve Covers Imports For 27 Months

Government unveiled the new economic growth model 9 months after it was officially announced during the tripartite meeting that was held on June 5, 2016, and reviewed, on the Finance Ministry’s website, a summary of 21 pages of the program that contains a work plan between 2016 and 2019, and another one until 2030, which is based on budget consolidation by covering expenditures from tax funds, reducing the treasury deficit and moving the internal financial market.

In the diversification and transformation of the economy between 2020 and 2030, the new model will raise GDP to 6.5%, and double it by 2.3 times per person, and for the industrial sector it noticed an increase from 5.3% in 2015 to 10% in 2016, and it will diversify the sector’s output and the export of products and the reduction of energy consumption from 6 to 3%.
According to the summary of the model, Algeria’s revenues, which fell by 32.9% in 2015, impose new spending mechanisms, and new financial resources, including the tax revenues by 11% each year, to cover 84% of expenditures in 2019 compared with a coverage rate of 47% in 2014, and reducing the budget deficit by 1.9% by calculating $ 50 per barrel of oil in 2017, $ 55 in 2018 and $ 60 in 2019, knowing that the total budget expenditure in calculating the equipment will reach 7000 billion dinars, and it should not be exceeded, according to the same source.
At this level, the balance of payments will rise by $ 2.2 billion in 2019, which would reduce the risk of internal and external indebtedness, as the new model will link the remaining funds with the exchange reserves, which will ensure 27 months of imports and the possibility of borrowing, while the same report describes some prices of materials as unfair by virtue of being sold to all classes at the same price, and uneconomical because it costs more than it is sold, and it proposed in this context, to correct the budget in a way that preserves social and economic gains and the adoption of special standards in support and the adoption of deep reform and follow-processes.
It should be noted that the government unveiled the new model for almost a year and announced a broad scheme to diversify the national economy, which relied heavily on oil rents by focusing on agriculture, industry and tourism as a new alternative and rely on 12 industrial productive sectors.