Algeria’s economy is reeling from a slump in oil prices and which in turn have hit hard the country’s foreign exchange earnings. The north African nation’s foreign exchange reserves fell by $6.1 billion this year to settle at $136.9 billion, Algeria’s Prime Minister Abdelmalek Sellal announced on Sunday.
Hydrocarbons, such as oil and natural gas, account for about 95 percent of Algeria’s export revenues and two-thirds of government revenues, according to the International Monetary Fund. But even with higher prices, revenues generated by the sale of oil will not be able to respond to social demands and the needs of economic development, according to the Algerian Prime Minister who was quoted by Algeria Press Service.
In March, Algeria’s government announced it was taking steps to alleviate barriers to private investment in the country for the first time in years in a move aimed at enhancing economic stability in the face of plunging oil and gas revenues and persistently strong imports.
Algeria’s international reserves have fallen from a high of $195bn in 2013 and they continue to decline at a rapid pace. The country’s trade balance has swung from a surplus of $25bn in 2011 to a deficit of about $13bn last year, and the government ran a budget deficit of about 14 percent in 2015.