Algeria Economic Outlook

February 5, 2019

Despite a robust performance from the non-oil economy, growth slowed slightly from Q2’s already weak showing in Q3, as oil and gas production contracted at an even sharper pace than in the previous quarter and as service sector growth softened slightly. Nevertheless, higher oil prices in the quarter likely buttressed the government’s coffers in the period. Furthermore, the agricultural sector continued to post strong growth, while activity in the industrial and construction sectors accelerated. Looking at Q1, Sonatrach recently signed a USD 1.4 billion petrochemical joint-venture with Total, and a USD 445 million contract with China’s CHEC for an LNG terminal.

Algeria Economic Growth

Sonatrach’s massive investment plan and a new energy law should drive growth this year by stimulating investment. However, a weak non-oil economy and high unemployment leave the country vulnerable to a prolonged downturn in oil prices. FocusEconomics panelists expect GDP to grow 2.4% in 2019, which is down 0.1 percentage points from last month’s forecast, and 2.0% in 2020.

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	119.0	-0.11 %	Feb 14

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