IMF and WB urge Algeria diversification
Algeria has been urged to diversify its economy which is heavily based on revenues generated from oil exports. This remark was made during the periodic assessments of the Algerian economy in the current year which has just a few days to go. The International Monetary Fund (IMF) and World Bank (WB) did show their satisfaction with the path the country is trying to adopt but they called for more effort to be done.
IMF and WB were pleased with the good macroeconomic results the country has realized but highlighted on the need to diversify the economy in order to ensure a sustainable growth and curb youth unemployment. The suggestions to Algeria will be part of the upcoming 2012 annual assessment of the Algerian economy to be published in January next year by the IMF Executive Board. The preliminary indications revealed recently by its staff announced that these prospects remained, certainly, favorable in the short term, but warned again that the fiscal sustainability and the financial stability in the mid-term became more dependent on oil price volatility.
Data from the IMF has given rise to expectations that 8.2% of the gross domestic product but the exchanges reserves and external debt remains did enjoy a similar faith because they were described as “very comfortable” and “very limited” while the public net debt hit 26 per cent of the GDP.
It has been stated earlier by IMF that the vulnerability to hydrocarbon prices increased, adding that the oil price ensuring the public finance balance amounted to US$121 in 2012. The increase in expenditure and the growing budget deficit is being considered by the World Bank to be unlikely sustainable unless the price of oil remains at a high price and seems like never to decrease.