Algeria Economic Outlook

September 8, 2020

The economy likely deteriorated considerably in the second quarter under the twin impact of pandemic-induced restrictions on activity and tumbling oil revenues, having shrunk at the fastest pace in at least a decade in the first quarter. Oil output slumped throughout Q2 following the agreement of the latest OPEC+ production cuts, hitting the lowest level since early 2000 in June and weighing heavily on government finances. Output dropped further still in July, boding ill for Q3, while a resurgence in Covid-19 cases through July–August is a further cause for concern. In politics, President Tebboune announced a referendum on a new constitution for 1 November, with proposed changes to give parliament and the prime minister more powers to govern. The move comes amid a febrile domestic political atmosphere, with year-long protests demanding reform only halted by the coronavirus outbreak.

Algeria Economic Growth

This year, the economy is projected to contract markedly due to falling domestic demand. Externally, weaker activity in key international markets is set to impair exports, with the prolonged nature of the pandemic and its impact on future oil and gas demand a continued risk to the outlook. FocusEconomics panelists foresee the economy shrinking 7.8% in 2020, which is down 0.3 percentage points from last month’s estimate, before growing 3.4% in 2021.

Algeria Economy Data

	2015	2016	2017	2018	2019
Population (million)	40.0	40.8	41.7	42.6	43.4
GDP per capita (USD)	4,153	3,919	4,012	4,081	3,914
GDP (USD bn)	166	160	167	174	170
Economic Growth (GDP, annual variation in %)	3.7	3.2	1.3	1.4	0.8
Consumption (annual variation in %)	3.6	2.6	2.2	2.7	1.9
Investment (annual variation in %)	5.7	3.5	3.4	3.1	1.0
Industrial Production (annual variation in %)	1.9	1.5	2.4	-1.5	2.7
Unemployment Rate	11.2	10.5	11.7	11.7	-
Fiscal Balance (% of GDP)	-15.3	-13.1	-6.6	-4.5	-5.1
Public Debt (% of GDP)	8.7	20.5	27.1	38.1	46.3
Money (annual variation in %)	11.7	3.5	14.4	0.5	-
Inflation Rate (CPI, annual variation in %)	4.4	5.8	5.9	3.5	2.4
Policy Interest Rate (%)	4.00	3.50	3.75	3.75	3.75
Exchange Rate (vs USD)	107.1	110.4	114.8	118.3	119.1
Exchange Rate (vs USD, aop)	100.4	109.4	110.9	116.6	119.4
Current Account (% of GDP)	-16.4	-16.4	-13.2	-9.6	-
Current Account Balance (USD bn)	-27.3	-26.2	-22.1	-16.7	-
Trade Balance (USD billion)	-18.1	-20.1	-14.4	-7.5	-
Exports (USD billion)	34.6	29.3	34.6	41.1	-
Imports (USD billion)	52.7	49.4	49.0	48.6	-
Exports (annual variation in %)	-42.5	-15.2	18.0	18.9	-
Imports (annual variation in %)	-11.8	-6.1	-0.9	-0.9	-
International Reserves (USD)	145	114	97.6	80.2	-
External Debt (% of GDP)	2.8	3.4	3.4	3.3	-

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Algeria Facts

	Value	Change	Date
Exchange Rate	119.1	-0.11 %	Jan 01

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