Government eyes slowdown — but not as much as IMF
Algeria’s government expects the economy to grow by 2.6% in 2019, down from the 4% it had fore- cast for 2018 because of lower spending. However this is more optimistic than the International Monetary Fund which believes growth will be lower than previously hoped. Either way, the economy remains set for a slowdown. The IMF’s October 2018 forecasts indicate the economy will grow by 2.4% in 2018, rather than the 3.0% envisaged six months earlier. The IMF still sees the economy pick- ing up to 2.7% in 2019 but then slowing to 1.8% and 1.1% in 2020 and 2021 respectively. The econo- my posted its rst acceleration in the annual growth rate for a year in the rst quarter of 2018. GDP expanded by 1.3% in the three months to March 2018 over the same quarter of the previous year. This was up from 0.7% in the previous two quarters but well down on 3.4% a year earlier. As recently as 2016 the economy was growing by more than 4% a year. The growth rebound was achieved despite a 2% fall in hydrocarbon activity. Non-hydrocarbon growth was 2% compared to the rst quarter of 2017. Within that, there was growth of 6.6% in transportation & communications, 5.3% in real estate, 5.0% in nancial services, and 3.8% in business services. Within industry, of the 10 indus- trial sub-sectors, ve experienced positive growth. The growth in the non-hydrocarbon sector will be seen as a reward for the authorities’ measures to diversify the economy away from oil and gas. The uptick may be a response to the government’s decision to print money to fund the de cit rather than impose fresh spending cuts.