Algeria’s dinar higher than its real value, says IMF

President of the International Monetary Fund’s delegation in Algeria Zine Ould Zidane Monday said the country’s economic performance was satisfying this year as inflation rate went down to 4.5 percent in the end of October following a good monetary policy.

Zidane believes that real GDP growth will be slow this year due to continuous fall of hydrocarbons sector.

The delegation is on a visit to Algeria between November 12^th and 25^thto hold annual talks. It came up with the fact that Algeria’s external financial situation is getting weak due to imports strong growth, hydrocarbons sector negative continuous growth and high local consumption.

According to Zidane, current account surplus will decrease to reach 1.1 percent of GDP following fall of hydrocarbon exports.

He said it is a “new phenomenon for Algeria after long years.”

He stressed the necessity of enhancing investments to increase hydrocarbons production and take measures to diversify economy and end continuous rise of local consumption and review public subsidy policies as well.

The Fund advises member countries like Algeria and Egypt to help the poor directly and stop subsidizing products because experiences showed that more than the half of subsidy allocations goes to 20 percent of the richest people in society.

He called on Algerian authorities to follow a strict policy for change rate, saying the national dinar price is higher than its real value although the Bank of Algeria reduced it by about 10 percent in October.

The Fund also recommended Algeria to enhance incomes out of hydrocarbons and public investment which is seen as a decisive factor for growth enhancement.