Algeria

The outlook for the Algerian economy has worsened considerably amid the Covid-19 pandemic. We had initially revised this forecast down to -9.6% in the April forecast round, however, our outlook has since become more pessimistic. We now forecast the economy to contract by 11.9% this year, bouncing back by 6.8% in 2021 owing to base effects. A further downward revision in real GDP growth partly reflects intensified lockdown measures. Although lockdown measures have started easing since June 7, with certain industries reopening and the curfew being shortened in 29 provinces and lifted in 19 provinces, the period of confinement extended beyond our initial expectations at the start of the pandemic. This has weighed down even further on our forecasts for household consumption, corporate demand and domestic investment. Weaker oil and gas production prospects have also contributed to the more pessimistic outlook, as Algeria has agreed to cut oil production aggressively to fulfil its commitments as a member of the Organisation of Petroleum Exporting Countries (OPEC), as well as the holder of the rotating OPEC presidency this year. This will weigh down significantly on real exports of fuel, which account for 85% of overall real exports. (Source: Algeria Quarterly Update, published July 2020.)

Macroeconomic Data

(2019)