Algeria has been able to control economic indices over the past three years, despite the impact of the difficult global crisis that is still looming on the world economy.
The World Bank said in early October that developing oil exporters, including Algeria, are expected to see economic growth of 4.1% this year and 2.7% in 2023.
The International Monetary Fund (IMF) also forecast that the growth rate of Algeria’s gross domestic product (GDP) will reach 4.7% by the end of 2022, one of the fastest growing rates in the world.
Based on its forecasts for global economic growth rates, the IMF last week released an interactive map that ranks growth rates into five descending categories, from fastest to slowest, with Algiers in the second category.
In terms of growth, it topped the Maghreb region’s economies, compared to Morocco (0.8%), Tunisia (2.2%), Libya (-18.5%) and Mauritania (4%).
The IMF highlighted that Algeria’s GDP growth rate is also the fastest in the western Mediterranean region, which includes Italy (3.2%), France (2.5%) and Spain (4.3%).
In its latest report, the United Nations Finance Agency had expected that the economy of Algeria would be one of the fastest growing Arab economies in 2022.
The IMF has included Algeria among the six Arab economies set to record the highest growth rates over the period, amid the ongoing crisis of the war in Ukraine and the Covid-19 pandemic, despite the impact of the global economic slowdown.
According to the IMF’s World Economic Outlook, Algiers should achieve a growth rate of 4.7% by the end of the current year, taking second place in North Africa after Egypt (6.6%).
In an exclusive interview for Al Mayadeen EnglishEzz El Din Dedan, an Algerian economics specialist, said that despite the impact of the difficult global crisis still hanging over the world economy, Algeria “has been able to control economic indices over the past three years despite the collapse in energy prices.”
Dedan pointed out that “with the recent rebound in oil and energy prices around the world amid the war in Ukraine, Algeria’s foreign exchange earnings have increased significantly and this gives the country scope for major financial moves in economic decision-making.”
Dedan added that the Algerian government has provided figures on Algeria’s high available foreign exchange holdings, with expectations of reaching $56 billion by the end of 2022 and a trade surplus of about $18 billion.
“These figures have not been recorded in Algeria for almost 10 years, since the oil price began to fall in 2014,” said the economist.
Historical increase in non-hydrocarbon exports
Although Algeria is 98% dependent on hard currency oil revenues, Dedan said, “Algeria has sought to diversify its economy through a series of measures taken in recent years, resulting in a historic surge in non-hydrocarbon exports where Algeria was able to increase those exports from $4.7 billion last year to $5 billion by the end of September.”
Algeria, a reliable energy supplier
On a related note, Algerian state-owned hydrocarbon company Sonatrach expects total gas and oil export levels to reach $50 billion by the end of this year.
Algerian Prime Minister Aimene Benabderrahmane indicated that Sonatrach had implemented an “accelerated program” to increase production.
Algiers has helped Europe diversify its energy supply by pumping more gas to Italy, which signed a deal in July to import billions more cubic meters via an undersea pipeline from the North African coast.
The North African capital has seen a string of high-profile visitors in recent months trying to boost energy exports as Europe struggles to replace Russian supplies.
During a visit to Algeria in September, EU Council President Charles Michel said the North African country was a “reliable energy supplier”.
In August, French President Emmanuel Macron welcomed moves by Algiers to “diversify” Europe’s gas supplies, and in July Italian President Eni, US Major Occidental, France’s Total and Sonatrach signed an oil and gas production-sharing deal A $4 billion deal with Algerian President Abdelmadjid Tebboune said he would supply Italy with “significant amounts of natural gas”.
Furthermore, Algerian Energy Minister Mohamed Arkab had indicated at an energy summit in Algiers that his country was studying the possibility of laying high-voltage cables under the Mediterranean Sea to export electricity to Europe, and that Algeria wanted to produce up to 50% of that electricity from renewable sources until 2035.
Notably, before the war in Ukraine, Algeria supplied the European Union with about 11% of its gas needs, while Russia supplied 47%.
First non-European country to introduce unemployment benefits
Asked whether Algeria’s current economic growth will help bring down Algeria’s 15% unemployment rate, economist Ezz El Din Dedan clarified that “there are relative estimates of unemployment in Algeria. About 60% of the composition of the Algerian economy is based on Algerians working on the black market.”
Dedan explained that the official figures do not represent the true proportion of the working class in Algeria because “most Algerian youth prefer not to declare their work and the figures from the national statistics agency do not include young people who prefer to work in the black market “.
According to the Algerian specialist, “It is certain that the unemployment rates in Algeria have not been updated for two years, but some measures have been taken in recent months, such as the first African country to offer this grant of about $ 100 (73 GBP) per month for unemployed young people, particularly university students.
Algerian President Abdelmadjid Tebboune announced in February that the government would introduce unemployment benefits for jobseekers between the ages of 19 and 40 in March, noting that there are over 600,000 unemployed in Algeria.
Tebboune said Algeria was the first non-European country to introduce such a benefit.
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