Algeria has trimmed its 2015 budget by just 1%. A 10% hike in defense spending is untouched despite a collapse in oil earnings. Misleading accounting remains.Algeria has released a much-awaited supplementary budget law for 2015. This is intended to help it adjust to the effect of the slump in oil prices on its economy, with the country’s key Saharan Blend crude grade falling to an average price of $58/B for the first half of 2015, little over half the year-ago figure. Output is also down (see p7).

But the latest budget law adopted this month leaves more questions than answers. Spending has been cut by a mere 1.4% from the original budget. Few individual departments saw their budgets fall, as Algiers sticks to social spending programs amid a fragile socio-economic and political climate. The entire, albeit modest, cut falls on the capital budget, which is reduced by 2.8% (see table). (CONTINUED - 1418 WORDS)