In 2014, the Algerian economy increased by 4%, up from 2.8% in 2013. Growth was mainly driven by the recovery of the oil and gas sector and further economic expansion of 3.9% estimated by 2015 and 4.0% on year 2016.
In 2012, the Algerian economy grew by 2.5%, up slightly from 2.4% in 2011. Excluding hydrocarbons, growth has been estimated at 5.8% (up from 5.7% in 2011). Inflation increased and was estimated at 8.9% (up from 4.49% in 2011). Although the financial performance of the authorities is good, thanks to modernization reforms, the budget deficit widened to 3.3% of GDP in 2012 (as against 1.3% in 2011) due to the continuation of expansionary fiscal policies beginning in 2011 to meet the social demands that strong in terms of purchasing power, employment and housing. The oil and gas sector is the country's main source of income, generating about 70% of total budget revenues. The economy is projected to grow by 3.2% in 2013 and by 4.0% by 2014. The country's external position remains comfortable in 2012, with a trade surplus of around USD 27.18 billion. The current account surplus is estimated at 8.2% of GDP and official foreign exchange reserves have been estimated at USD 190.7 billion by the end of December 2012, equivalent to more than three years of non-factor goods and services imports. Oil and gas export revenues account for more than 97% of total exports.
Algeria has many possibilities to increase its economic growth, including large foreign exchange reserves coming from oil and gas. A development strategy that targets stronger and sustainable growth will create more jobs, especially for young people, and reduce the housing shortages facing the country. Therefore, the national strategic option to revitalize the process intended to diversify the economy begins with the non-oil sector while deepening the reforms necessary for the structural transformation of the economy.
Video Economy of Algeria
Tren historis
Total imports and exports on the eve of the French invasion (in 1830) did not exceed Ã, Â £ 175,000. In 1850, that figure reached Ã, Â £ 5,000,000; in 1868, Ã, Â £ 12,000,000; in 1880, Ã, Â £ 17,000,000; and in 1890, Ã, Â £ 20,000,000. From this point, progress is slower and the numbers vary greatly from year to year. In 1905, the total value of foreign trade was £ 24.5 million. About five-sixths of the trade is with or through France, to which countries some Algerian goods have been received duty-free since 1851, and all since 1867. French goods, except sugar, have been received to Algeria without payment of duties since 1835 After the 1892 increase in French minimum tariffs which applied to Algeria for the first time, foreign trade is greatly reduced.
GDP per capita grew 40 percent in the 1960s to a peak of 538 percent growth in the seventies, but this proved unsustainable and growth collapsed into a paltry 9.7% in the turbulent eighties. Failure of timely reform by successive governments causes GDP per capita to shrink by 28% in the nineties.
This is a graph of Algerian gross domestic product trends at a market price estimated by the International Monetary Fund with figures in millions of Algerian Dinars.
For comparison of purchasing power ratio, US Dollar is exchanged at 70.01 Algerian Dinar only (updated May 24, 2007). The average wage in 2007 was around $ 18-22 per day.
Burdened with massive foreign debt, Algiers terminated a one-year standby agreement with the International Monetary Fund in April 1994 and the following year signed a three-year extension facility ending April 30, 1998. In March 2006, Russia agreed to waive $ 4.74 billion debt of the Soviet-era Algeria during President Vladimir Putin's visit to the country, the first by Russian leaders in half a century. In return, President Abdelaziz Bouteflika agreed to buy $ 7.5 billion worth of combat aircraft, air defense systems and other weapons from Russia, according to head of Russian arms exporter Rosoboronexport. Several advances in economic reforms, Paris Club debt rescheduling in 1995 and 1996, and the expansion of the oil and gas sector contributed to a recovery in growth since 1995, reducing inflation by about 1% and narrowing the budget deficit. The Algerian economy has grown by around 4% every year since 1999. The country's foreign debt has fallen from a high of $ 28 billion in 1999 to its current level of $ 5 billion. The spike in oil prices in 1999-2000 and the tight fiscal policy of the government, as well as the large increase in trade surplus and nearly three times the foreign exchange reserves have helped the state finances. However, the ongoing drought, the after effects of the floods of November 10, 2001 and the erratic oil market made the prospect for 2002-03 more problematic. The government promises to continue its efforts to diversify the economy by attracting foreign and domestic investment outside the energy sector.
President Bouteflika has announced sweeping economic reforms, which, if implemented, will significantly restructure the economy. However, the economy is still heavily dependent on volatile oil and gas revenues. The government continues to diversify the economy by attracting foreign and domestic investment outside the energy sector, but has little success in reducing high unemployment and improving living standards. Other priority areas include banking reform, improving the investment environment, and reducing government bureaucracy.
The government has announced plans to sell state companies: sales of national cement plants and steel mills have been completed and other industries ready to offer. In 2001, Algeria signed the Association Agreement with the European Union; has initiated accession negotiations for entry into the World Trade Organization.
Maps Economy of Algeria
Gross domestic product (GDP)
In 2007, the estimated Algerian GDP was 125.9 billion US dollars according to the official exchange rate. Using purchasing power parity, GDP estimates are US $ 268.9 billion, or US $ 8,100 per per capita basis. Estimated real growth rate is 4.6 percent. In 2007 the industry accounted for 61 percent of GDP, service was 31 percent, and agriculture provided the remaining 8 percent. The country has enjoyed several years of strong economic performance, with strong non-hydrocarbon growth, low inflation, an overall budget surplus of 8 percent of GDP and a positive trade balance of 28 percent of GDP in 2008. The average annual non-hydrocarbon GDP growth averaging 6 percent in 2003-2007, with total GDP growing at an average of 4.5 percent over the same period due to less buoyant oil production in 2006-07. Foreign debt has actually been eliminated, and the government has accumulated substantial savings in oil stabilization funds (FRR). Inflation, the lowest in the region, remained steady at 4 percent on average for 2003-07. However, the economy remains heavily dependent on hydrocarbons, representing 98 percent of total exports; the continued slowdown in global energy demand for significant pressure on Algeria's fiscal and external positions.
Government budget
In 2007 the government revenue of US $ 58.5 billion exceeded the expenditure of US $ 41.4 billion. Receipts from the hydrocarbon industry typically account for about 60 percent of revenue.
Industry
Agriculture, forestry and fishing
The agricultural sector in Algeria, which accounts for about 8 percent of gross domestic product (GDP) but employs 14 percent of the workforce, is unable to meet the food needs of the country's population. As a result, about 45 percent of food is imported. The main plants are wheat, barley, and potatoes. Farmers have also managed to grow dates for exports. Cultivation is concentrated in the lush coastal plains of the Tell region, which represent only a portion of the total Algerian region. Overall, only about 3 percent of Algeria's territory can be worked on. Even in Tell, rainfall variability has a significant impact on production. Government efforts to stimulate agriculture in less fertile pastures and desert areas have met with limited success. However, shepherds raise cattle, especially cattle and sheep in the highlands.
The periodic climate and fires in Algeria are not conducive to the burgeoning forest industry. However, Algeria is a producer of cork and pine Aleppo. In 2005, logging reached 7.8 million cubic meters, while sawnwood production only amounted to 13 million cubic meters per year.
The fishery industry in Algeria does not take full advantage of the Mediterranean coast, partly because fishing is generally done from small family ships, not commercial trawlers. However, the government is trying to increase its relatively small catch - a little over 125,000 metric tons in 2005 - by modernizing fishing ports, allowing foreigners to lure in Algerian waters, and subsidizing projects related to fishing.
Fishing
Fisheries are a thriving but small industry. The caught fish is basically sardines, bonito, smelt mackerel and sprats. Fresh fish is exported to France, dried fish and preserved to Spain and Italy. Coral fisheries are found along the coast from Bona to Tunis. Average annual catch of about 142,000 tons, 54% of sardines.
Mineral
Algeria is rich in minerals; the country has many iron, lead, zinc, copper, calamine, antimony, and mercury mines. The most productive ones are iron and zinc. Lignite is found in Algeria; a very large phosphate bed was found near TÃÆ' Â © bessa in 1891, generating 313,500 tons in 1905. The phosphate bed also works near SÃÆ' Â © tif, Guelma and AÃÆ'¯n BeÃÆ'¯da. There are more than 300 quarries that produce, among other stones, onyx and white and red marbles. The Algerian Onyx of Ain Tekbalet was used by the Romans, and many ancient mines have been found near Sidi Ben Yebka, some definite from which the long lost Numidian marbles were taken. Salt is collected at the edges of chotts.
Banking and finance
The Algerian banking sector is dominated by public banks, which suffer from high levels of non-performing loans to state-owned enterprises (SOEs). In 2007, public banks controlled 95 percent of the bank's total assets. In 2007, bad loans represented 38 percent of total loans in commercial banks, according to International Monetary Fund (IMF) estimates. Simple progress has been made in implementing some of the reforms proposed by the IMF, including replacing bank credit to SOEs with government subsidies; enhance bank supervision, accountability and transparency; and modernization of payment systems. One particular reform that has been achieved is the establishment in 2006 of the Algerian Real Time Settlement system, which facilitates the fast and reliable electronic payment transfers. In November 2007, proposed sales and privatization CrÃÆ'Â © dit Populaire d'AlgÃÆ' Â © rie postponed due to turbulent market conditions. Recently, HSBC and Deutsche Bank announced that they will start commercial banking (in the case of HSBC) and investment banking (in Deutsche Bank case) in Algeria. Only a few companies are listed on the underdeveloped and relatively opaque Aljir stock market. The non-bank sector is still underdeveloped, although recent reforms in the field of regulation and oversight have laid the foundations for leasing, factoring, and venture capital.
Algerian equity markets remain relatively shallow, with only two companies listed on the Bourse d'Algerie. In contrast, the bond market has grown in recent years: the government has issued debt instruments with various maturities of up to fifteen years, and five private companies have issued corporate bonds.
The insurance sector was liberalized in 1995, but still dominated by government-owned institutions and so far contributed only a small part of the economy: total premium volume amounted to about 1 percent of GDP. The pension sector includes three pension funds, covering approximately 40 percent of the working population in 2005.
Based on 2006 and 2007 estimates, 31 percent of the total population has access to financial services, with one bank branch or post office every 7,250 residents. The microfinance sector still has great potential for further development. A 2006 study could not find the main regulatory hurdles for microfinance and suggested that postal networks of post offices - offering increased amounts of financial services to customers - have great potential to improve access to finance for Algerians.
The official cash flow continued to increase from USD 1.9 to 2.9 billion between 2005 and 2007.
Tourism
The Algerian tourism industry, which accounts for only about 1 percent of GDP, lags behind neighboring Morocco and Tunisia. Algeria only receives about 200,000 tourists and visitors annually. Ethnic French Algerians represent the largest group of tourists, followed by the Tunisians. Low tourism levels are caused by a combination of bad hotel accommodation and the threat of terrorism. However, the government has adopted a plan known as "Horizon 2025," which is designed to address the lack of infrastructure. Various hotel operators plan to build hotels, especially along the Mediterranean coast. Another potential opportunity is an adventure holiday in the south. The Algerian government has set a goal of increasing the number of foreign visitors, including tourists, to 1.2 million by 2010.
Other industries
Algeria has many diverse industries that contribute to meeting local demand and several times for export. The food industry is one of the largest industrial sectors in Algeria. Private companies generally dominate the food sector in Algeria with big companies like Cevital, La Belle, Groupe Bimo, Hamoud Boualam, Ifri, GÃÆ' Â © nal Emballage.
The pharmaceutical industry is also present in Algeria, with the dominance of the state-owned Saidal company, as well as other small private companies. The local pharmaceutical industry covers 38% of local needs.
The mechanical industry has been in Algeria for a long time, with the state-owned SNVI (SociÃÆ'Â © Nationale des VÃÆ' Â © hicules Industriels) becoming the largest producer of buses and industrial vehicles in the region. These vehicles are exported to Maghreb, Africa, and the Middle East. Mercedes-Benz also invests in Algeria in cooperation with state-owned companies to manufacture industrial and military vehicles. Deutz AG also invests to produce agricultural utilities.
In the electronics and electronics industry, Algeria has made a big leap in the field compared to its neighbors. Algeria Region Bordj-Bou-Arreridj is the largest electronics pole in Africa, local company covers 83% of its needs and exports other products, Algeria starts to produce about 100% home-made electronic products including smart phones, tablets, TVs, TV decoders, air cooling products..., at least 16 large companies active in the field, some companies are: Bya Electronics, HB Technologies, ZALA Computer, Cristor, Condor, Cobra, Continental Æ' © lectronique, Essalem Electronics, Samha, FRIGOR, BMS Electric, Bomare Company, etc.
Currency, exchange rate, and inflation
Algerian currency is a dinar (DZD). These dinars are loosely related to the US dollar in managed buoys. Algeria's main export, crude oil, is priced in dollars, while most Algerian imports are priced in the euro. Therefore, the government is trying to manage the fluctuation of dinar value. As of April 2008, US $ 1 is equivalent to about DZD64.6.
Algeria's foreign currency reserves have grown rapidly since 2000, reflecting rising oil prices exported. By the end of 2007, foreign exchange reserves reached US $ 99.3 billion, up from US $ 12 billion in 2000 and equal to nearly four years of imports. In 2007, the inflation rate was estimated at 4.6 percent.
In 2010, the IMF raised concerns about the poor management of Algerian monetary and inflationary systems.
In April 2014, a report focusing on global economic projections was published by the IMF, which, by its estimates, in 2015, Algeria's economic growth will fall by 1.5%, while unemployment will rise by 1.2%.
Labor
The largest company is the government, which claims 32 percent of the workforce. Although industry is a much larger economic part of agriculture, agriculture employs fewer people (14 per cent of the workforce) than industry (13.4 per cent of the workforce). One reason for this disparity is that the energy sector is very capital intensive. Trade accounts for 14.6 percent of the workforce, while construction and public works employ 10 percent, reflecting government efforts to improve state infrastructure and affordable housing supplies.
Unemployment remained at around 10% since 2010 but significantly higher for youth (24.8%) and female (16.3%)
By the end of 2006, the unemployment rate was about 15.7 percent, but the rate among those under 25 was 70 percent. In 2005 the labor force participation rate was only 52 percent, compared to the Organization for Economic Cooperation and Development averaging 70 percent. Newcomers to the workforce and lack of emigration options make unemployment a chronic problem and an important challenge for the government. Given its highly capital-intensive nature, the hydrocarbon industry is not in a position to employ many job seekers.
Foreign economic relations
Algeria is looking for more foreign trade and investment. For example, the hydrocarbon law adopted in April 2005 is designed to encourage foreign investment in energy exploration. Increased production may increase Algeria's profile as a member of the Organization of Petroleum Exporting Countries. In accordance with its pro-trade agenda, Algeria achieved an associate status with the European Union (EU) in September 2005. Over a 12-year period, the association agreement is expected to allow Algeria to export goods to the EU, tariff-free, while gradually raising import tariffs from the EU. Algeria has signed bilateral investment agreements with 20 different countries, including many European countries, China, Egypt, Malaysia and Yemen. In July 2001, the United States and Algeria agreed on a framework for discussion leading to such an agreement, but the final agreement has not been negotiated. In the end, trade liberalization, customs modernization, deregulation, and banking reform are designed to improve the country's negotiating position when seeking access to the World Trade Organization.
In 2007, Algeria's imports reached US $ 26.08 billion. Main imports are capital goods, foodstuffs, and consumer goods. The main import partners are France (22 percent), Italy (8.6 percent), China (8.5 percent), Germany (5.9 percent), Spain (5.9 percent), United States (4.8 percent) , and Turkey (4.5 percent). In 2007 Algeria exported US $ 63.3 billion, more than doubling imports. Exports account for 30 percent of gross domestic product (GDP). Hydrocarbon products constitute at least 95 percent of export earnings. The main exports are petroleum, natural gas, and petroleum products. The top export partners are the United States (27.2 percent), Italy (17 percent), Spain (9.7 percent), France (8.8 percent), Canada (8.1 percent) and Belgium (4.3 percent ). Algeria supplies 25 percent of EU natural gas imports. In 2007 Algeria posted a positive trade balance of US $ 37.2 billion. In 2007 Algeria achieved a positive account balance of US $ 31.5 billion. High prices for Algerian energy exports are a key driver for an increase in current account balance.
The Algerian trade surplus for 2010 rose to more than $ 83.14 billion. The Algerian Center for Algeria's Directorate of Information and Statistics of Customs links this increase from a year earlier with higher fuel revenues due to higher prices for one barrel of oil, and a slight decline in imports of consumer non-food items. The center said that Algeria's exports rose by 78.26% over the period from January to November 2010 from $ 27.51 billion to $ 44.4 billion during the same period in 2009. Imports grew by 89.1% from $ 43.36 billion to $ 76.35 billion between 2009 and 2010.
Reflecting the strong oil export revenues, foreign debt is on a downward trajectory. For example, this income facilitates an earlier repayment of a $ 900 million loan from the African Development Bank and Saudi Arabia. In March 2006, the purchase of Algeria 78 aircraft from Russia led to the cancellation of all of Algeria's debt to Russia. In 2006, foreign debt was estimated at US $ 4.4 billion, down from US $ 23.5 billion in 2003.
In 2006 foreign direct investment (FDI) in Algeria reached US $ 1.8 billion. The petrochemical, transportation, and utility sectors are the recent FDI beneficiaries. FDI into the oil sector is expected to rise as a result of the hydrocarbon law, approved in April 2005, creating a fairer field for foreign oil companies to compete with the state-owned Algerian oil company Sonatrach for exploration and production contracts.. Algeria is also looking for foreign investment in power and water systems.
As of August 2006, the World Bank's cumulative assistance to Algeria amounted to US $ 5.9 billion, covering 72 projects. Currently, the World Bank is pursuing seven projects, particularly budget modernization, mortgage financing, natural disaster recovery, energy and mining, rural employment, telecommunications, and transportation. In 2005, US $ 4.4 million of economic aid to Algeria from the United States, largely due to the Middle East Partnership Initiative (MEPI) and the remainder for International Military Education and Training (IMET). MEPI encourages economic, political and educational reforms in the Middle East. In 2006 IMET, which provided US military training to foreign troops, had a budget of US $ 823 million. In 2005, the EU contributed US $ 58 million for Algerian economic development under the European-Mediterranean Partnership.
See also
- Energy in Algeria
- List of Algerian companies
- Poverty in Algeria
- Taxation in Algeria
References
Note
The work cited
- the Algerian country profile. Library of Congress Federal Research Division (May 1, 2006). This article combines text from this source, which is in the public domain.
- This article incorporates public domain material from the CIA World Factbook website https://www.cia.gov/library/publications/the-world-factbook/index.html.
- Laouisset, Djamel (2009). Retrospective Study of the Algerian Iron and Steel Industry. New York City: Nova Publisher. ISBN 978-1-61761-190-2
External links
- The Algerian Economy in Curlie (based on DMOZ)
- Tariffs applied by Algeria as provided by ITC Market Access Map, online databases of customs tariffs and market requirements
Source of the article : Wikipedia
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