2023-10-28 16:42:46
ALGIERS – The increase in investments, particularly in large industrial projects, stimulated Algeria’s economic activity in the first quarter of 2023 and should continue to support growth between 2023 and 2025, indicated the World Bank (WB) in its latest report devoted to the economic situation in Algeria.
“Algeria has the potential to diversify its economy, reduce its dependence on imports and increase its non-hydrocarbon exports while creating sustainable jobs in the private sector,” argued Kamel Braham, resident representative of the World Bank in Algeria, cited in this report.
“The good performance of the hydrocarbon sector and the positive dynamic of investments should continue,” observed, for his part, Cyril Desponts, senior economist of the World Bank for Algeria, assuring that “Algeria has implemented macroeconomic shock absorbers in the short term through the accumulation of foreign exchange reserves and budgetary savings.
In its report, which addresses the main economic developments and prospects of the country, the WB underlined that Algeria’s economy “returned in 2022 to its pre-pandemic level, with a recovery which continues in the first half of 2023. The Algeria’s growth is also expected to return to its pre-COVID trajectory by 2024, driven in particular by the hydrocarbon and agriculture sectors.
Regarding non-hydrocarbon activity, the report estimated that growth in gross domestic product (GDP) should be “stronger in 2024 and 2025, thanks to the resumption of agricultural production et of crude oil production following that of OPEC quotas”, emphasizing in this regard the growth of investment which should remain “robust” and continue to support industrial activity, in particular in the private sector.
According to World Bank projections, “inflation is expected to gradually decline in 2024 and 2025” with prudent monetary and fiscal policies and if “rainfall recovers, favoring robust agricultural production.”
Read also: Prime Minister: Algeria forecasts economic growth of 5.3% in 2023
Regarding the trade balance, the World Bank forecasts that it will remain “positive” during 2023, 2024 and 2025, while also forecasting the continued accumulation of foreign exchange reserves during these three years.
“The authorities have built up more foreign exchange reserves and oil savings, strengthening the medium-term resilience of the Algerian economy, while increasing gas prices and rising oil prices during the second quarter of 2023 might prolong the hydrocarbon bonanza”, we read in this document.
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