Algeria Economic Forecast

Algeria Economic Outlook

January 8, 2019

After a weak showing in H1, growth likely improved in H2 2018 amid a ramp-up of fiscal spending and investment from state oil firm Sonatrach. While tumbling oil prices in Q4 likely dented economic momentum, the annual trade deficit more than halved as of November, though foreign reserves kept falling. Further Sonatrach investments should drive momentum going forward. In recent weeks, the company signed contracts for over USD 1 billion of natural gas projects, adding to the USD 6 billion phosphate plant deal signed on 26 November in a joint-venture with a Chinese firm.

Algeria Economic Growth

The new energy law expected in H1 2019 should drive economic growth this year by attracting FDI inflows, synergizing with Sonatrach’s massive investment plan. Nevertheless, the country remains plagued by a weak fiscal position, high youth unemployment and a lack of economic reforms, while a sustained lull in oil prices is a major downside risk to the outlook. Met the why particular panelists expect GDP to grow 2.5% in 2019, which is down 0.1 percentage points from last month’s forecast, and 2.2% in 2020.

Algeria Economy Data

20132014201520162017
Population (million)38.339.111.011.841.5
GDP per capita (USD)5,4595,4654,1633,9034,114
GDP (USD bn)209214166159170
Economic Growth (GDP, annual variation in %)2.83.83.73.31.6
Consumption (annual variation in %)3.43.23.62.6-  
Investment (annual variation in %)8.66.45.73.5-  
Industrial Production (annual variation in %)2.2-1.40.61.52.3
Unemployment Rate9.811.611.211.511.7
Fiscal Balance (% of GDP)-0.9-8.0-16.9-13.5-  
Public Debt (% of GDP)7.17.214.919.6-  
Money (annual variation in %)11.612.911.73.5-  
Inflation Rate (CPI, annual variation in %)3.32.94.86.45.6
Policy Interest Rate (%)4.004.004.003.503.75
Exchange Rate (vs USD)78.4287.92117.1111.4114.8
Exchange Rate (vs USD, aop)79.6180.60110.4119.4111.9
Current Account (% of GDP)0.6-4.3-16.4-16.5-12.9
Current Account Balance (USD bn)1.2-9.3-27.3-26.2-22.0
Trade Balance (USD billion)9.40.5-18.1-20.1-14.3
Exports (USD billion)64.460.134.629.334.4
Imports (USD billion)55.059.752.749.448.7
Exports (annual variation in %)-11.3-6.6-42.5-15.217.5
Imports (annual variation in %)13.88.5-11.8-6.1-1.5
International Reserves (USD)19518014511597.9
External Debt (% of GDP)2.52.62.83.4-  

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Algeria Facts

ValueChangeDate
Exchange Rate118.4-0.11 %Jan 30

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