Algeria Continues to Reel under Impact of Oil Prices Fall-IMF

Despite a sizable fiscal consolidation in 2017, the fiscal and current account deficits remain large in Algeria, which continues to face important challenges posed by the fall in oil prices four years ago, the IMF said.

The fall in oil revenues was mostly felt in Algeria’s reserves which fell by $17 billion to $96 billion down from 200 billion in 2014 , the Executive Board of the International Monetary Fund (IMF) said at the end of Article IV consultations with Algeria.

Unemployment increased to 11.7 percent in September 2017 from 10.5 in September 2016 and remains particularly high among the youth (28.3 percent) and women (20.7 percent), it said.

In a comment on the short-term reforms to wean off dependence on oil, the IMF directors deemed that treating symptoms will “likely exacerbate fiscal and external imbalances, raise inflation, accelerate the loss of international reserves, heighten financial stability risks and, eventually, lower growth.”

They, inter alia, recommended fiscal consolidation and an independent monetary policy aimed at containing inflation.