Algeria: Does the latest IMF report reflect the reality of the economy? – official data, global inflation, currencies, imports, exports,
The latest IMF report on the Algerian economy for 2022 being ambiguous, requires clarification because it is through a calm diagnosis and a strategic vision that a coherent socio-economic policy is developed. Remember that any IMF report starts from official data communicated to it by any government, then corrected by consistency tests.
1.-According to the IMF, due mainly to the price effect and very incidentally to the volume effect, the additional revenue expected if the price of hydrocarbons – oil and gas – remains at the current level will be for Libya 39 billion dollars, an increase of 74%, Iraq of 149 + 73%, the Emirates 190, + 46%, Kuwait 84, + 46%, Qatar 84, + 40%, Bahrain 11, + 39%, Oman 39, +34%, Saudi Arabia 327, + 28% and Algeria 59 billion dollars with an increase of 28% for 2021. With a drop in physical volume of approximately 25/30% compared to the years 2006/ 2007, gas exports reached approximately 43 billion gaseous cubic meters and for oil 500,000 barrels/d due to the fact that domestic consumption is almost identical to exports, amplified by the policy of subsidies and which might represent a case of non-increase in production and a new energy consumption model (Energy mix whose energy efficiency e and renewable energies) 80% of exports by 2030 (see our television interviews April 18/24, 2022, Alg24 and France 2 Paris). However, we continue to build housing according to the old methods while the new techniques make it possible to save more than 30% of energy, and renewable energies, despite speeches and numerous seminars on January 01, 2022 barely covers one percent (1%) of domestic consumption remaining a long way to cover the forecasts of the Ministry of Energy 40% of domestic consumption by 2030.
As for imports of goods and services (the latter regarding 6 billion dollars in 2021 once morest 10/11 between 2018/2019), they are estimated at 46 billion dollars according to the IMF, and this question arises: what will be the impact of global inflation in terms of currency balance. For the same level of imports, with all the restrictions, by weighting international prices only by 50%, let us recall before this increase only the food item, the food crisis with the tensions in Ukraine, which should affect a good number of countries, amounted to almost 9 billion dollars in 202, the integration rate in 2021 of private and public enterprises does not exceed 15%, not including new investments requiring foreign exchange and the dinar part, we will have almost 70 billion dollars imports of goods and services if we want to relaunch the national economy, there is therefore a deficit between receipts and expenditure of approximately 11 billion dollars. This is not specific to Algeria but concerns all the rentier countries with non-diversified economies what they gain, in the export of hydrocarbons, they lose it in import value, always having to draw up the currency balance.
2.- The IMF forecasts a growth rate for 2022 of 2.4% for Algeria and with a drop in the unemployment rate, having revised downwards its projections for the years 2022 and 2023, counting on a rate, of unemployment, respectively, by 11.1% and 9.8%, while it predicted in its October report a rise in unemployment to 14.7% in 2021, estimating it in 2021 at 13.4%, due to a growth rate in 2021 of 4%. Algeria’s current account balance is expected to stand at 2.9% of GDP before declining to -0.2% of GDP in 2023, representing -2.8% of GDP in 2021, once morest the previous forecast of a rate of -7.6% of GDP.
In order not to mislead public opinion, because hydrocarbon revenues for Algeria representing with derivatives approximately 98% of its foreign currency inflows, the IMF must enlighten us on the methodology of projection calculations because how with a population growth rate between 2020/2021 between 1.8 and 2% according to official data, a demand for employment around 350,000 to 400,000 jobs per year which is added to the current unemployment rate estimated in 2021 by the IMF at 13, 4% with such a growth rate, the unemployment rate may be 11% in 2022 and less than 10% in 2023.
Remember that a growth rate is calculated in relation to the previous period: a high growth rate in relation to a low growth rate in relation to the previous period gives a cumulative low rate. For the calculation of the unemployment rate, have we broken down jobs that create added value, jobs that constitute a transfer of value and jobs in the informal sphere with very low productivity and have we taken into account the destruction of jobs due to the crisis, the rise in input prices and the weakness of public demand via hydrocarbons which still determines growth and restrictions, only for the BTPH in 2021 more than 500,000 jobs without counting the lethargy of many other businesses operating with a reduced workforce? Don’t these IMF data contradict the basic rules of economics where the employment rate is a function of the growth rate and the structures of productivity rates and it is a universal law. While according to the majority of international experts, a growth rate in real terms of 8/9% per year over at least five years is needed to absorb this flow and reduce social tensions.
3.-Beware of the purely monetary vision where in order to preserve the foreign exchange reserves estimated at 44 billion dollars at the end of 2021, the economic machine is blocked, restriction of untargeted imports, where in addition to imported inflation, the legal and especially monetary instability, accelerates the inflationary process which in 2022 experiences an unequaled double-digit level, between 50 and 100%, the price of almost the majority of unsubsidized products having doubled, the Algerian citizen in 2022 not being only a digestive tract with the slow disappearance of the middle strata core of any development, in order to artificially fill the budget deficit, by the accelerated devaluation of the dinar carrying out forced savings and contributing to the deterioration of the purchasing power of the majority. However, Algeria, a strategic actor and the stability of the Mediterranean and African region, subject to good governance and the valorization of knowledge, can achieve its objectives reconciling economic efficiency with deep social justice, social cohesion being the nerve of national security.
University professor, international expert Doctor of State 1974- Abderrahmane MEBTOUL
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