In a report published at the end of July 2016 on Algeria’s economy, the World Bank announced a significant fall in the country’s foreign reserves in 2018 as oil prices plunge.

“The plunge in oil prices impacted public finances, trade balance and foreign reserves. The budget deficit widened from 1.4% of GDP in 2013 to 15.7% in 2016. Overall reserves slumped from $194 billion in 2013 to $108 billion in 2016 and should even fall more to $60 billion in 2018. Inflation rose to 4.8% in 2015,” the report stated.

It also highlights Algeria’s dependency on its oil revenues indicating that “the economy depends greatly on oil and gas as they significantly contribute to exports and public earnings, 95% and 75% respectively”. Depicting this grim picture, the report concludes that “Algeria will fully experience 2018’s financial and economic shock, with its reserves around $60 billion”.

Reacting to this alarming situation, the Bretton Woods institution told Algerian authorities to not neglect the report as its population’s welfare and national security depend on it.

Last June 5, Prime Minister, Abdelmalek Sellal announced that foreugn reserves melted by $6.1 billion in the first five months of 2016 to $136.9bn.

The government of Algeria estimated at the end of 2015, that foreign reserves should decrease by $30 billion in 2016.

Alain Okpeitcha