Algeria Economic Outlook

October 2, 2018

The oil-sector, led by state firm Sonatrach’s USD 56 billion investment plan for the 2018–2022 period, continues to propel economic momentum, while non-oil growth remains feeble amid extremely high youth unemployment. Sonatrach recently announced several new projects, including a USD 6 billion phosphate plant in a joint-venture with Chinese firms, a new USD 280 million gas pipeline to boost exports to Europe, and the start of offshore drilling in 2019. It will also increase LNG exports to Turkey by a billion cubic meters a year starting next year. Meanwhile, the government’s recently unveiled draft budget for 2019 sees a 1.5% spending reduction and the postponement of subsidy cuts.

Algeria Economic Growth

Higher oil prices and output should drive growth in 2019 and beyond, aided by a new energy law expected early next year which should bolster foreign investment in the sector. The large fiscal deficit, however, will continue to hang over the economy. FocusEconomics panelists expect GDP to grow 2.5% in 2018 and 2.4% in 2019, which is down 0.1 percentage points from last month’s forecast.

Algeria Economy Data

	2013	2014	2015	2016	2017
Population (million)	38.3	39.1	40.0	40.8	41.5
GDP per capita (USD)	5,459	5,465	4,163	3,903	4,104
GDP (USD bn)	209	214	166	159	170
Economic Growth (GDP, annual variation in %)	2.8	3.8	3.7	3.3	1.6
Consumption (annual variation in %)	3.4	3.2	3.6	2.6	-
Investment (annual variation in %)	8.6	6.4	5.7	3.5	-
Industrial Production (annual variation in %)	2.2	-1.4	0.6	1.5	2.3
Unemployment Rate	9.8	10.6	11.2	10.5	11.7
Fiscal Balance (% of GDP)	-0.9	-8.0	-16.9	-13.5	-
Public Debt (% of GDP)	7.1	7.2	14.9	19.6	-
Money (annual variation in %)	11.6	12.9	11.7	3.5	-
Inflation Rate (CPI, annual variation in %)	3.3	2.9	4.8	6.4	5.6
Policy Interest Rate (%)	4.00	4.00	4.00	3.50	3.75
Exchange Rate (vs USD)	78.42	87.92	107.1	110.4	114.8
Exchange Rate (vs USD, aop)	79.61	80.60	100.4	109.4	110.9
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)	9.4	0.5	-18.1	-20.1	-14.3
Exports (USD billion)	64.4	60.1	34.6	29.3	34.4
Imports (USD billion)	55.0	59.7	52.7	49.4	48.7
Exports (annual variation in %)	-10.3	-6.6	-42.5	-15.2	17.5
Imports (annual variation in %)	13.8	8.5	-11.8	-6.1	-1.5
International Reserves (USD)	195	180	145	115	97.9
External Debt (% of GDP)	2.5	2.6	2.8	3.4	-

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Algeria Facts

	Value	Change	Date
Exchange Rate	118.3	-0.11 %	Oct 12

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