Risks to economic growth from the oil price fall have turned negative. The speed and scale of the fiscal consolidation programme have raised concerns.
• Economic risk (MEDIUM): The economy is forecast to enter a period of substantially lower growth thanks to the plans to halve the budget deficit that have raised fears of public resistance.
• Political risk (HIGH): The first legislative elections returned the party of President Abdelaziz Bouteflika to power but were overshadowed by low turnout. The president’s age and ill health have raised concerns over the succession process.
• Financial risk (LOW): With its closed financial system Algeria is largely immune to global volatility. Falling oil prices increased risks of financial instability but a rebound may ease pressure.
• Commercial risk (MEDIUM): A new investment law offering tax breaks to investors should helped raise Algeria’s poor ranking in the World Bank’s Doing Business Report in 2017 and boost lending.