Algeria's economy one of the fastest growing, in continuous recovery
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Despite the repercussions of the difficult global crisis that are still looming over the global economy, Algeria was able to control economic indices over the past three years.
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The IMF highlighted that Algeria's GDP growth rate is the fastest in the Western Mediterranean region.
The World Bank, in early October, indicated that developing oil exporters, including Algeria, are expected to witness an economic growth of 4.1% this year and 2.7% in 2023.
The International Monetary Fund (IMF) also forecasted that the growth rate of Algeria’s Gross Domestic Product (GDP) will score 4.7% at the end of 2022, one of the fastest-growing rates in the world.
Based on its forecasts for global economic growth rates, the IMF published last week an interactive map that divides growth rates into five descending categories, from fastest to slowest, in which Algiers was placed in the second category.
It topped the Maghreb region economies in terms of growth, 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%).
The United Nation’s financial agency had expected in its recent report that Algeria's economy will be one of the fastest-growing Arab economies in 2022.
The IMF placed Algeria among the six Arab economies that will record the highest growth rates in the mentioned period, despite the effects of the global economic slowdown, in light of the continuing crisis of the war in Ukraine and the Covid-19 pandemic.
According to the IMF’s World Economic Outlook, Algiers is set to achieve a growth rate of 4.7% by the end of the current year, ranking second in North Africa after Egypt (6.6%).
In an exclusive interview for Al Mayadeen English, Ezz El Din Dedan, an Algerian economics specialist, said that despite the repercussions of the difficult global crisis that are still hanging over the global economy, Algeria “was able to control economic indices over the past three years, despite the collapse of energy prices.”
Dedan pointed out that “with the recent recovery of oil and energy prices globally amid the war in Ukraine, there is a significant increase in Algeria’s foreign exchange earnings, and this is what gives the country a margin of greater financial movement in economic decision-making.”
He highlighted that “the supplementary Algerian budget law for 2022, as well as the budget law for the coming year, witnessed a record increase in public spending by 56%, which is another indication that the Algerian economy is in a continuous recovery.”
Dedan added that the Algerian government presented figures on the high levels of foreign exchange available in Algeria with expectations of reaching 56 billion dollars by the end of 2022 and a trade surplus of about 18 billion dollars.
According to the economics specialist, “These figures have not been recorded in Algeria for almost 10 years, since the beginning of the oil price plunge in 2014.”
Historical rise in non-hydrocarbon exports
Despite depending on oil revenues from the hard currency by 98%, Dedan said, Algeria “has sought to diversify its economy through a set of measures that have been taken over the past years, yielding a historical rise in non-hydrocarbon exports, where Algeria was able to increase these exports from 4.7 billion dollars last year to 5 billion dollars until the end of last September.”
He said that the Algerian government expects this value to reach 7 billion dollars and aims to reach a target of 10 billion dollars in 2023, underlining that “this volume has not been recorded by Algeria since its independence, which signifies a historical performance of non-hydrocarbon exports.”
Algeria, a reliable energy supplier
In a related context, the Algerian state hydrocarbons firm, Sonatrach, expects the total level of gas and oil exports to reach 50 billion dollars by the end of this year.
Algerian Prime Minister Aimene Benabderrahmane pointed out that Sonatrach had put in place an "accelerated program" to bump up output.
Algiers has helped Europe diversify its energy supplies by pumping more gas to Italy, which, in July, signed a deal to import billions more cubic meters via an undersea pipeline from the North African coast.
The North African capital has seen a series of high-profile visitors in recent months seeking to boost energy exports, as Europe struggles to replace Russian supplies.
European Council President, Charles Michel, said in September during a visit to Algeria that the North African country is a "reliable energy supplier."
In August, French President Emmanuel Macron welcomed moves by Algiers to help "diversify" Europe's gas supplies, and in July, Italy's Eni, US major Occidental, France's Total, and Sonatrach signed a $4 billion oil and gas production-sharing contract that Algerian President Abdelmadjid Tebboune said would provide Italy with "significant volumes of natural gas.”
In addition, Algerian Energy Minister Mohamed Arkab had indicated at an energy summit in Algiers that his country was examining the possibility of laying high-voltage cables under the Mediterranean to export electricity to Europe and that Algeria hopes to produce as much as 50% of its electricity from renewable sources by 2035.
It is noteworthy that before the Ukraine war, Algeria provided the European Union with some 11% of its gas needs, against 47% provided by Russia.
First non-European country to introduce unemployment grant
Asked about whether Algeria’s current economic growth will help decrease the 15% unemployment rate in Algeria, economics specialist Ezz El Din Dedan clarified that “there are relative estimates regarding unemployment in Algeria. About 60% of the composition of the Algerian economy is based on Algerians that work in the black market.”
Dedan explained that the official figures do not represent the true proportion of the working class in Algeria as “most of the Algerian youth prefer not to declare their work, and the figures provided by the National Statistics Authority do not include young people who prefer to work in the black market.”
According to the Algerian specialist, “It is certain that unemployment rates in Algeria were not updated for two years, but there are some measures taken during the past months, such as the unemployment grant approved by the Algerian authorities,” highlighting that Algeria is the first African country to launch this grant of about $100 (£73) a month for unemployed youth, especially university students.
Algerian President Abdelmadjid Tebboune announced in February that the government will introduce in March unemployment benefits for jobseekers aged between 19 and 40, noting that there are over 600,000 unemployed people in Algeria.
Tebboune said Algeria was the first non-European country to introduce such a benefit.
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