ALGERIA: GAS REVENUES RELIEVE FISCAL PRESSURES BUT UNLIKELY TO MITIGATE SOCIAL RISKS

ALGERIA: GAS REVENUES RELIEVE FISCAL PRESSURES BUT UNLIKELY TO MITIGATE SOCIAL RISKS

   Wed, 20 April 2022

Algeria's gas output has become more important as part of supplies to European countries, following Russia's invasion of Ukraine. The implications for Algeria's immediate economic outlook have been more clearly positive as higher gas prices will help keep Algeria’s economy afloat. This positive initial picture may grow more mixed in the months ahead. A wide fiscal deficit, rapidly falling reserves, and limited room for fiscal reform, owing to high levels of social instability, mean that current government spending may temper economic discontent that fuels protests in the short term; however, this is not likely to change the long-term situation for the impoverished population.