WORLD BANK EXPECTS ALGERIA’S ECONOMIC GROWTH TO SLOW DOWN IN 2017-2019
WASHINGTON, April 18 (NNN-APS) — The growth of Algeria’s economy remained buoyant in 2016, despite low global oil prices, says the World Bank (WB), which, however, expects it to slow down to average 1.2 per cent in 2017-2019 because of the rebalancing of public finances.
In 2016, Algeria posted a sustained growth at a rate of 3.8, almost similar to the previous year’s 3.9 per cent, said the World Bank in its Algeria’s Economic Outlook: April 2017 published here Monday.
This solid growth was driven by the recovery of hydrocarbon production which increased by 3.6 per cent in 2016 compared with 0.4 per cent in 2015, explained the Bank.
This sustained growth is the fruit of a process of rebalancing of the public finances, which allowed for reducing the budgetary deficit to 12.2 per cent of gross domestic product (GDP) in 2016, from 16.2 per cent of GDP in 2015, said the World Bank.
This rebalancing of the public finances, necessary for the national economy, should in the medium term lead to the slowdown of growth because of a drop in public expenditure but which is expected to reduce the budgetary deficit.
“The downward revision of growth projections compared with the Fall (Autumn) 2016 projections is due to the announced fiscal consolidation and a moderation of hydrocarbon production growth, said the World Bank. Real GDP growth is expected to average 1.2 per cent in 2017-2019.
For 2017, the World Bank expects 1.5 per cent growth which will decline to 0.6 per cent in 2018 before recovering to 1.5 per cent in 2019.
Thanks to the control on expenditures, Algeria will be able to reduce the budget deficit to 4.7 per cent in 2017 and to 1.0 per cent in 2019.
The World Bank also said that in 2017-19, a modest 2.5 per cent increase in hydrocarbon production resulting from the start of production of new oil wells and a positive correction in oil prices will mitigate the negative effect of fiscal and current account consolidation on the real non-oil sectors.
The World Bank projections are based on the hypothesis of a strong increase of 27 per cent in oil prices in 2017.
Source: NAM News Network