APS : Tuesday, 21 March 2017
ALGIERS- The International Monetary Fund mission Chief for Algeria Jean François Dauphin highlighted Monday, in Algiers, the resilience of the Algeria’s economic activity despite the current situation of the oil market,
recommending a more gradual economic recovery, while preserving social achievements.
“Given the relatively low level of public debt, Algeria could afford a somewhat more gradual fiscal consolidation than entailed in the current medium-term budget framework if it were to consider a broader range of financing options, including external borrowing and the sale of state assets,” said Dauphin in a press conference at the end of his mission to Algiers.
The key challenge at this juncture is choosing a policy mix that will help the economy in a way that is sustainable and at a lower cost in terms of growth and employment.
According to the FMI mission, it is important to avoid a “too abrupt” fiscal deficit reduction to reduce the risk of a sharp slowdown in growth, said Dauphin.
Achieving this goal will require “wide-ranging structural reforms” as part of an overall strategy, “designed and sequenced so that reforms reinforce each other and the burden of economic adjustment is shared equitably,” he explained.
For this IMF representative, social stability is a fundamental achievement of the Algerian society and it is essential to preserve it.
However, the IMF calls for a “sustainable” adaption of the Algerian economy to the oil price shock, which is expected to last.
“Fiscal consolidation will need to be sustained as oil prices are expected to remain low and hydrocarbon reserves are exhaustible,” said Dauphin.