The Report: Algeria 2016

Hydrocarbons represent 31% of GDP and more than 60% of government revenue. However, low oil prices have had a dramatic impact on producers around the world. Algeria has been unable to shield itself from that trend, which has had significant implications for the domestic economy. The drop in oil prices, as well as rises in government spending in recent years, has led to the emergence of large fiscal and current account deficits. These are expected to fall in coming years as spending cuts, efforts to widen the tax base and diversification efforts all start to have an effect, and while both foreign reserves and government debt levels will come under increasing pressure, both appear set to remain reasonably comfortable for the foreseeable future.