Algeria at a Crossroads

IMF News, December 2, 2021

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Algeria at a Crossroads

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• Authors: Mahmoud Harb IMF Middle East, Central Asia Department December
• Published: December 2, 2021

Recovery from pandemic and oil shock

• The Algerian economy is gradually recovering from the initial impact of the pandemic and last year’s oil price shocks.
• The health crisis has eased; most containment measures have been lifted, and domestic production of vaccines is supporting immunization efforts.
• With the rebound in hydrocarbon production and prices, growth has resumed, but the outlook is highly uncertain.

Macroeconomic imbalances and policy recalibration

• The 2020 shocks exacerbated the economy’s longstanding imbalances, accelerating the rise in government debt and the fall in international reserves.
• Policy recalibration is needed to safeguard macroeconomic stability.

Government Action Plan and reforms

• The Government Action Plan unveiled in September incorporates wide-ranging reforms to:
  • support the recovery,
  • unleash new growth drivers, and
  • bolster governance and social cohesion.
• Progress on these reforms is crucial for transitioning to a more stable, diversified and inclusive growth model.

Sources of growth, diversification, and human capital

• Algeria has many untapped sources of growth and jobs.
• Developing these sources requires a profound transformation of the economy and diversifying it away from hydrocarbons.
• The recovery from the pandemic provides a unique opportunity for Algeria to rebuild resilience and harness the potential from its dynamic youth.

By Mahmoud Harb, IMF Middle East and Central Asia Department — December 2, 2021

References

• https://www.imf.org/en/News/country-focus
• PRESS CENTER
• Read the press release
• Algeria and the IMF
• https://www.imf.org/en/home