August 1, 2021

Algeria announces measures against falling oil prices



Algerian President Abdelmadjid Tebboun announced several financial measures to deal with the “difficult” economic situation caused by the fall in the price of oil in the international market, the official APS agency reported today.

According to this source, the head of state presided over an inter-ministerial meeting in which he ordered the Ministry of Finance to present an “immediate” presentation of a finance law to suppress “inconsistencies” of the general budgets approved for this 2020 and “counteract” the effects of The current economic crisis.

These budgets, approved last December by interim president Abdelkader Bensalah just 24 hours before the presidential elections, includes a controversial reform of the hydrocarbons law, reduces public spending by 7.7% over the previous year and allows international loans to be requested, an option that the military regime avoided so far.

In this regard, the Presidency showed its “firm” refusal to resort to loans or “unconventional” financing, in reference to the printing of currency carried out in 2018 to address the budget deficit.

On the other hand, he revealed that the Ministry of Commerce will carry out an “intelligent” management of imports “taking into account that the State has sufficient means for 2020 and 2021 without having to suffer shortages of industrial products or necessary for the citizen” .

In addition, the Central Bank was entrusted to transfer all customs confiscations to the legal gold reserve and monitor the reimbursement of loans agreed to banks.

Algeria is plunged into an acute economic crisis since oil prices plummeted in 2014, which constitutes its main wealth and accounts for 95 percent of the exports of a country with hardly any industry.

In the face of falling incomes, the government has resorted to foreign reserves for the last five years to maintain social peace and the system of subsidies for gasoline, housing and necessities.

The reserves, estimated at around 178,000 million euros at the beginning of the crisis, are currently below 90,000 million, a decline that has led numerous experts to look towards the international loan.

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