World Bank Report: Algeria exchange reserves to be depleted within 19 months

In its latest assessment report, the World Bank has dealt a new scathing blow to the flagging Algerian economy by forecasting a swift shrinking of Algeria’s hoarded external revenues.

The World Bank surmised in its late October 2015 report that Algeria’s state revenues accrued mostly from hydrocarbons exports would be depleted within a period of 19 months as an average if stringent remedial measures are not taken rapidly by the relevant authorities through a set of cost-slashing oriented reforms with the aim of diversifying the national economy.

The main reason behind this bleak situation now besetting the Algerian economy is the this year’s severe drop in oil prices on the world market and Algeria’s heavy dependence on hydrocarbons export incomes at a rate of 95%  of the state’s  total foreign hard currency revenues.

World Bank further criticized the overall investment climate in Algeria, which it considered as lacking attractiveness for potential investors unlike for instance Morocco and Egypt, which received rosy comments from the world financial institution for their recent economic performance.

In January, the World Bank had planned for the Algerian economy a growth of around 3.3%.

The Algerian economy in 2015 will record growth of just 2.6%, according to a biannual report of the World Bank on the global economic outlook released Tuesday.These revised forecasts, as a reminder, are down compared to other ones   issued earlier, which projected a GDP growth of 3.3%. They join on the other hand those mapped out by the International Monetary Fund in April.

The growth of the Algerian economy, yet the document says, will be 3.9% in 2016 and 4% in 2017, i.e an increase from the forecast of the World Bank in January 2015 (3.5% for two years).