1 minute read
ALGERIA
RB: Over the coming year, Algeria’s hydrocarbons sector is expected to benefit from increased public and foreign investment. Attempts to boost private sector activity and diversify the economy will nonetheless remain constrained by an overcentralised political system, distrust of foreign involvement, and cumbersome bureaucratic processes.
High oil and gas export revenue will help to improve the fiscal and current account positions. As a result of improved financial conditions, the authorities will likely boost social spending to help the population cope with strong inflationary pressures and to maintain social and political stability. This trend, combined with tighter control over the public space, means that a reemergence of the 2019 Hirak countrywide protest movement calling for political and institutional reform is not expected in the medium term. Nonetheless, geopolitical tensions with Morocco will remain high in 2023, and Algeria is unlikely to reopen the gas pipeline that connects Algeria to Europe via Morocco.
JM: Algeria holds the world’s third-largest reserve of shale gas, behind Argentina and China but ahead of the US, and has stepped in to fill the gap in the European gas market. Oil and gas make up 90% of Algeria’s exports. The country’s secondlargest export is fertilisers, worth $2.5 billion in 2022 and dependent on the fossil fuel industry. Algeria’s oil and gas industry is also poised for expansion, with Western energy countries announcing plans for further investment in the nation’s energy trade infrastructure. This development is expected to bolster Algeria’s standing as a top global exporter and maintain a substantial trade surplus for at least the next decade.
Algeria’s primary imports are the machinery needed for gas drilling and processing, valued at $3.9 billion in 2022, followed by cereals, plastics, consumer electronics, and dairy and honey. Middle Eastern countries have a milk shortage due to a lack of hay and an imbalance between their appetite and supply.
Overall, Algeria’s exports rose from $38.7 billion in 2021 to $66.3 billion in 2022, with its key markets being Italy, Spain, France, South Korea, and the US. Total imports increased from $33.5 billion to $35.1 billion, with China, France, Italy, Turkey, and Brazil being the primary sources of imports.