2020, annus horribilis for Algerian finances
Oil wells in Algeria.
Black gold is the country's first manna.
Getty Images / Keystone-France
Text by: RFI Follow
2 min
The oil rent, on which the good health of the country's economy depends, has melted under the combined effect of the Covid-19 pandemic and the fall in oil prices.
Oil revenues fell 40%, burdening government tax revenues by 31%.
The result: a 5.2% recession and a deep economic crisis.
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Africa's fourth-largest economy is 90% dependent on hydrocarbons for its export earnings, and when the crisis is as severe on oil markets as it was in 2020, the country suffers from its lack of diversification.
Oil exports fell 11% in volume last year but 40% in value following the drop in crude prices.
And the whole economy, interventionist and hyper-centralized, found itself blocked.
Investments and vital government orders for businesses and households fell sharply, as did foreign exchange reserves.
Reduced to nothing, the budgetary room for maneuver imposed a dry regime.
Postponement of major works, and limitation of imports.
On a daily basis, the crisis has resulted in a drop in the income of Algerian households, closures of businesses or shops, and therefore an increase in unemployment.
For 2021, Algerian leaders want to believe in a recovery and anticipate a 10% jump in oil sales.
But if crude prices have risen to around $ 50 per barrel, global demand remains weak.
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Algeria
Oil
Economic crisis