World Bank Warns Algeria Of Unemployment, Inflation

date 2016/10/16 views 250 comments 0

icon-writer Sofiane.A/English version: Dalila Henache

World Bank predicted a slowing in the real GDP in Algeria in 2016, reaching 3.6%, and falling further in 2018 to 2.6%, while the large increase that will occur on the output of energy sources in the years 2017 and 2018, with the start of production in the new oil wells, will mitigate the negative impact of the expected decline in the oil price on the real non-oil sectors.

World Bank report, which singled out the Middle East and North Africa, shows that the increasing unemployment rate will affect the Algerian families' expenditure, but it is assumed that the government is making some progress, specifically through the application of fiscal consolidation measures.

Regarding the fiscal deficit, the international body's October Report expected that the deficit will remain large at around 13.2% of GDP in 2016, indicating that it will shrink gradually to 8.0% in 2018, in light of the impact of lower oil prices on the financial public revenues, with the depletion of reserves that are available to the fund for adjusting revenues.

"Authorities would resort to cover the deficit by issuing new debt securities, with the expectation of rising the ratio of debt of GDP from 13.6% of GDP in 2016 to 25.1% in 2018."

"Current account's deficit is expected to shrink slightly from 15.5% of GDP in 2016 to 10.4% in 2018."

As for the registered growth, the report revealed that the Algerian economy noticed a growth in the first half of 2016 at a rate of 3.6% compared to 3.9% in 2015, and the sharp drop in oil prices was offset by an increase of the production of energy sources, and cutting the public spending, which led to rising inflation and unemployment, and the budget deficit and external account which exceed 10% originally increase more and more, as explained by the report, which warned of a slower growth over the next two to three years, with the government's application of fiscal consolidation measures.

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