The government of Algeria announced it will reduce the 2020 State Budget by half and increase the Inter-professional Guaranteed Minimum Wage to face the challenges stemming from the coronavirus pandemic.

“The Council of Ministers decided, after the presentation made by the Minister of Finance on the preliminary draft Supplementary Finance Act for the current financial year, to reduce the operating budget by 50%, from 30% initially. This reduction includes the expenses of the state and its institutions,” says a statement by the Algerian presidency, relayed by APS, the state information agency.

This measure should be followed by an increase in the guaranteed minimum wage as of 1 June 2020 to provide additional income to Algerians hit hard by the pandemic.

With more than 4,474 cases of covid-19 recorded to date and 463 deaths, Algeria is one of the African countries most affected by the disease. This situation exposes its economy to serious shocks, particularly exacerbated by the fragile oil sector's share of its exports.

According to government estimates, the level of the country's foreign exchange reserves is expected to decline more sharply than expected by the end of the year to $44.2 billion from an initial forecast of $51.6 billion.

The government plans to exempt from taxes, income less than or equal to 30,000 Algerian dinars as of June 1, to help small businesses cope with the crisis.

Moutiou Adjibi Nourou