Faced with a rapidly deteriorating economic outlook, Algeria’s embattled interim government plans to cut spending to AD7.77 trn ($65.3bn) for 2020, down 5.2% in nominal terms versus the finance ministry’s forecast of AD8.2tn ($68.9bn) for 2019. But this won’t make a dent in the country’s deficit, given that dwindling oil and gas exports mean that revenues are also set to fall. Adding to the gloom for Algeria’s long-term outlook is that it is infrastructure spending that is seeing the biggest cuts, whilst salaries, pensions and subsidies continue to swallow up most of the budget.
Weekly protests since February aimed at overthrowing the ‘system’ continue. But the economy is suffering from political uncertainty. The army’s purge of the ousted Bouteflika regime has led to “economic disruptions due to abrupt changes in management and supervision, as well as investment uncertainty,” the World Bank says. (CONTINUED - 1068 WORDS)