Algeria: Foreign Monetary Reserves Drop on Oil Price Fall

Algerian Prime Minister Ahmed Ouyahia revealed Saturday that the country’s reserve of foreign monetary dropped to less than US$80 billion.

In a news conference concluding the 6th cycle of the National Council of the Democratic National Rally, he said: “unfortunately, foreign monetary reserves dropped to less than US$80 billion (around US$79.80 billion)”.

End of November, Algeria’s reserves of foreign monetary reached US$82.12 billion compared to US$97.33 billion end of 2017. Financial pressures increased during the past years in Algeria with the drop in global oil prices since the second half of 2014.

The occurrences in the global energy markets reflected the country’s reserves of foreign monetary that declined sharply from US$192 billion in 2014 to US$108 billion mid-2017. Oil and gas account for 60% of the budget and 94% of total exports revenue. The North African country also increased state spending for 2018 by 25% after a 14% cut in 2017.

The government expects the economy to expand by 2.6% this year due to a 1.5% reduction in spending and lower energy revenue projection. Oil and gas earnings should reach US$33.2 billion, down from the US$34.37 billion target for 2018, because of growing domestic consumption.

The government is benefiting from a recovery in global crude oil prices but a large proportion of energy revenue is still being used to pay for goods imports due to poor domestic production.