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Algeria Economic Monitor — Fall 2020: Navigating the COVID-19 Pandemic, Engaging Structural Reforms

Algeria Economic Monitor — Fall 2020: Navigating the COVID-19 Pandemic, Engaging Structural Reforms
The report “Navigating the COVID-19 pandemic, engaging structural reforms” presents an overview of Algeria’s recent macroeconomic developments and of its short-term economic outlook. Chapter 1 presents the country’s macroeconomic developments in 2019, which establishes the context for the unprecedented developments of 2020 related to the COVID-19 pandemic. Chapter 2 details the impact of the COVID-19 pandemic and concurrent crash in oil prices on various dimensions of Algeria’s economic fabric. Finally, the conclusion presents the short-term outlook for the Algerian economy. In 2019, Algeria’s economic growth rate decelerated for a fifth consecutive year amid the protracted social mobilization and political transition, which weakened consumer and business confidence and spending. At the sectoral level, the structural decline of the hydrocarbon industry persisted, with the industry declining by 4.9%, while the non-hydrocarbon segment rose by a modest 2.4% in real terms. In 2020, the Algerian economy is projected to post a significant real GDP contraction in 2020 as a result of the twin shocks of containment measures and the fall in hydrocarbon export receipts brought about by the COVID-19 pandemic. In this context, the authorities took several measures to provide immediate relief to households and to businesses and have announced far-reaching structural reforms to transition towards a private-led economic development model, while preserving support to the most vulnerable segments of the population. Success will hinge on the decisiveness of the reform agenda, on the strength of the private sector response, and on the authorities’ ability to concurrently restore macroeconomic equilibria.
Source: The World Bank – ME and north Africa