NewsAlgeria: The IMF warns about the serious economic situation...

Algeria: The IMF warns about the serious economic situation in the country

The International Monetary Fund has published a report on the Algerian economy for the year 2021. The economic entity presents a bleak situation for the North African country. The IMF expects Algeria’s total public debt to reach more than 63%, compared to 53% last year. According to this report, the IMF expects to record around 6% inflation during 2021 in Algeria. Likewise, the budget deficit is estimated to be more than 18%, while last year it was 12%. The oil reserves of Algeria, one of the main producers and exporters of oil, have declined in recent years. According to the Bloomberg economic portal, Algeria is experiencing a reduction in its oil exports. The African country sold 290,000 barrels a day abroad in January, 36% less than in December 2020. The internal demand for fuel has increased, so Algiers begins to consider measures on the transformation of Algeria into a non-oil country. Likewise, Algiers is considering the possible exit of the Organization of Petroleum Exporting Countries (OPEC). Algeria is also one of the main gas exporters in the area. For example, it is the main supplier in Spain, although this year sales have decreased by 11.1%. In general terms, Algerian exports abroad fell by around 30% last year. Given this serious financial situation, the Algerian government will have to draw up new measures to boost its economy, an economy that is not so dependent on oil. However, it will have to struggle given the bleak data presented by the IMF.The United Nations Economic Commission for Africa (UNECA) has also assessed the situation in the country. The UN body has described the level of Algerian trade as “weak” compared to the rest of the economic community in the region. The African country, despite presenting a mostly desert landscape, has a fertile part in the north where agriculture could be developed. However, the UNECA report notes that the agriculture sector accounts for 12.2% of the country’s GNP. Despite Algeria’s geographic location and climate, tourism also does not provide much income. According to the World Tourism Organization, the profits of this sector do not exceed 10% of the national GDP. This critical economic panorama affects the general per capita income of Algerians. This has sparked protests seeking to improve living conditions. Citizens must face the high price of electricity, consumer goods and the depreciation of the local currency against foreign currencies. To face these social demands, the Algerian government has proposed to increase the minimum wage. However, the country’s unions have assured that this measure cannot provide solutions to the tense situation facing the country. Not only is there a disagreement between the unions and the government, but there are also disagreements between the workers’ associations. The General Union of Algerian Workers, the main organization in the country, has ensured that, to achieve a dignified life, the income of an Algerian family must be around $ 350. On the other hand, other independent unions have declared that the income must not fall below 600 dollars.Otherwise they warn that families will fall into poverty.While a large part of society borders on poverty, other citizens who work in certain sectors such as banking or the oil industry have a salary of more than $ 10,000. This income can be compared to the 200 dollars earned by employees in the agriculture, construction or Civil Protection sectors. Recently, members of Civil Protection and firefighters have protested in the capital to demand job improvements, in addition to demanding recognition for the effort they make. These workers are the ones who must deal with the coronavirus pandemic, which has already infected more than 122,000 Algerians. This economic gap is causing the disappearance of the middle class, as sociologist Nasser Jabi points out. “The imbalances in the distribution of wealth in the country in recent years are moving towards the dissolution of the middle class,” says Jabi. These differences also create a narrow class of rich and a broad class of poor. For the sociologist, this problem is “a reflection of the economic and social policies of successive Algerian governments.”

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