Raouya: “Algeria’s Financial Situation Is Well Under Control”

After a significant reduction of the deficit of the trade balance, in 2017 and some 500 billion dinars of liquidities mobilized, the Algerian Government seems to apprehend the coming years with serenity, if one relies on the sanguine statements made on Sunday, by the Minister of Finance, Mr. Abderrahmane Raouya.

Speaking to channel 3 of the Algerian Radio, he said that the financial situation of the country is apprehended positively for 2018, adding that the deficit of the trade balance was significantly curtailed in 2017.

Mr. Raouya also indicated that the inflation rate for the new year of 2018 is forecast at 5.5% and that the rate of economic growth would reach 4%.

He also recalled that the 2018 Finance Act included a “fairly large increase” in the capital budget compared to the operating budget, “slightly lower”. 

A measure, he said, which should allow to  scale up investments in basic infrastructure and, in the “next two to three years”, achieve an “even higher growth rate and ensure a lower deficit.”

Asked about the slowdown in the level of economic growth, despite investment incentives, Mr. Raouya explained that this is the result of the “drastic” decline in oil revenues, which has forced the state to freeze all capital budgets.

He also underlined that after the amendment of the law on money and credit, it was decided to ensure the financing of the capital budget by the Bank of Algeria to allow the national economy to bounce back.

Mr. Raouya further stated that these are structural reforms, in the short and medium term, that will be progressively implemented throughout the years from 2018 to 2020.

Commenting on this type of funding, the finance minister answered that this was the most difficult option to take, in order not to resort to external borrowing, but he added, this must be done “in a rigorous framework “. in order not to face an inflationary spiral”.