Experts: “Does the Algerian government have enough leeway to deal with looming economic crisis?”

According to a host of seasoned economic experts, Algeria is moving towards a serious economic crisis. This is what the economic indicators announced. Oil prices have been falling steadily for nearly a year now. At the end of August 2014, a barrel of Brent was selling at $ 103. Today, it is below $ 50, without showing any signs of any uptick.

Worse, if the World Bank prediction turns out to be right; the price of a barrel of oil will slump to around $ 40 by 2016 due to the massive influx of Iranian oil on the world market.

A figure close to the reference price of a barrel to $ 37 set by the Algerian Government in its finance law. Algeria hasn’t yet steeped into the hardcore of the economic crisis but, already, the first signs of the upcoming damaging shocks start to appear.

The dinar is being routed because of the significant depreciation in its value versus the US Dollar. It has surpassed for the first time in its history the hundred dinars to the dollar on July 20.

Since then, the national currency has continued to beat its own record downward. The Revenue Regulation Fund (FFR) or the savings that has amassed Algeria during the “bonanza era” when the oil barrel reached over $ 100, has lost more than 1.000 billion dinars since March 2014.

This is a clear sign that Algeria’s huge budget deficit will certainly become untenable on account of the steady decline in the price of oil.

Furthermore, Algeria’s exchange reserves meant to ensure imports were estimated at 160 billion dollars in March, after plummeting by twenty billion dollars during the first three months of the year 2015.

At best, Algeria has therefore in reserve the equivalent of two or three years of imports until the IMF comes knocking at the country’s door. With the economic crisis now looming, is the Algerian government able to find adequate and long-term solutions to withstand the painful shock without very nefarious repercussions on the wary Algerian population notably on the poor and the needy?