World Bank: Government Decision To Raise Fuel Prices Is Not Unfair To Fragile Groups

World Bank report for the second half of 2017 was optimistic, and showed rosy figures of the Algerian economy in 2018, with a growth rate of 3.6%.

Washington-based Bretton Woods Foundation praised the 2018 fiscal law measures, including reform of energy subsidies which was supervised by the Algerian government, through increasing the fuel prices, asserting that it was accompanied by other measures to mitigate the effects of price increases on fragile groups.

The World Bank on Tuesday raised its growth forecast for Algeria in 2018 and 2019, and expected recovery that will be supported by the government’s new financial measures on investment financing. 

The World Bank, in its semi-annual report, that was published in Washington on the international economic prospects, expected the stabilization of Algeria GPD at 3.6% in 2018, compared to 1% in its June report, by up to 2.6%.

It also raised its growth forecast for 2017 at 2.2% against its earlier forecast of 1.8%, representing a difference of 0.4 points. 

According to the same figures, although the slight decline in growth in 2019, which is estimated at 2.5%, the growth will remain nonetheless up by one point from last June’s forecast of 1.5% growth.

“The new investment expenditures and financial measures that are introduced by the Finance Act of 2018 would raise the growth in Algeria in the short term”. 

In the chapter on the growth in the MENA region, the bank said that for Algeria, the public investment expenditures that are related to the 2018 budget and the new financial direction for short-term growth will be boosted.

According to the World Bank, Algeria will maintain a high pace and achieve better figures for most MENA countries, including oil exporters, which will experience a slowdown in growth. 

The World Bank lowered its forecast for the last three months of growth for three GCC countries, which are Saudi Arabia, Kuwait, Oman, Morocco and Tunisia.

It explained that several oil exporting countries, such as Algeria, Saudi Arabia and Russia, took measures to “boost their budget and restore revenues and expenditures”, after the collapse of oil prices. 

“These countries continued their efforts to diversify the economy, citing Algeria, Nigeria and the United Arab Emirates”.