Government intends to put an end to subsidizing gasoline prices starting from 2019 and to raise subsidies on other products in 2020, Finance Minister, Abderahmane Rawouia, said on Saturday, on the sidelines of a meeting of Arab Finance Ministers and IMF officials to discuss financial reforms in the region, that was hosted in Dubai.
“Government was looking for reforms in the subsidy system as it seeks to get rid of the budget deficit in three to four years”.
The minister did not specify the other products that will be subsidized in 2020, explaining that the state supports a wide range of goods and services such as electricity, services, fuel and oil, and justified the government’s step as trying to eliminate the budget deficit.
“Government does not need to borrow money this year, with the possibility of resorting to borrowing next year”.
“Reduction of subsidies would be made in the context of reforms that aimed at making the system more efficient and giving more support to low-income Algerians”.
“Government did not expect the need to borrow money this year, although borrowing could not be ruled out next year”.
Algeria relies heavily on oil and gas revenues and has received financial support from the recovery of global oil prices in recent months in addition to cutting government spending.
According to IMF estimates, Algeria recorded a fiscal deficit of 3.2% of GDP last year, compared with 13.5% in 2016.