Algeria plans to cut spending in 2019 in a modest reversal of 2018, when a blowout budget was planned but in reality spending undershot. Algiers is no closer to ending a run of budget deficits stretching back to 2009; it would need an improbable $88/B to balance its 2019 finances with the budget anticipating a $17.4bn deficit.

Algeria has run up cumulative budget deficits of over $100bn since 2009, with deficits recorded even in 2011-14 when oil prices were over $100/B.

They have ballooned since as oil prices tanked (see charts 1 &2). 2017 was the closest Algeria has got to balancing the budget in recent years, with a deficit of ‘only’ $10.8bn (8.8% of GDP). But austerity was reversed in the 2018 budget as Algeria embarked on plans to stimulate the economy through counter-cyclical spending funded by the central bank printing money (MEES, 13 October 2017).

Actual spending for 2018 appears to have undershot that...