Algeria’s economic performance is expected to remain solid, with growth projected to reach 2.5% in 2012, supported by a buoyant non-hydrocarbon sector which is bolstered by public spending, the International Monetary Fund (IMF) said on 12 November, at the end of Article IV discussions. For 2013 growth is forecast to reach 3.4%, underpinned by domestic demand and a recovery in the hydrocarbon sector. The current account surplus is expected to stand at 7.1% of GDP in 2013 and foreign exchange reserves in 2012 and 2013 “will remain very comfortable and external debt levels very low.” The IMF added that the oil stabilization fund, net of public debt, reached 26% of GDP.

But the IMF is concerned about inflation surging to 8.4% in 2012 as a result of the fiscal expansion in recent years. It notes that the fiscal balance is expected to deteriorate to 3.7% of GDP, weighted by the full effect of wage increases and back payments. It points out that “vulnerability to hydrocarbon prices has constantly increased, with the breakeven price reaching $121/B in 2012.” Unemployment was stable at 10% in 2011, but youth and female unemployment rates remain high at 21.5% and 17% respectively. (CONTINUED - 262 WORDS)