Battered by the oil price slump, Algeria will abolish gasoline subsidies in 2019 as it continues to implement time-buying measures, including import restrictions and money printing. The IMF estimates Algeria ran a fiscal deficit of 3.2% of gross domestic product last year, against 13.5% in 2016. Algeria’s foreign exchange reserves are expected to drop to $85 billion at best by the end of 2018 down from $194 billion in 2014, barely enough to cover 18 months of imports. Last year, violence erupted in many Algerian cities, including Bejai in the north east, in protest against austerity measures. The violence highlights the risks for Algerian authorities from altering its subsidy system in a country where social peace hinges on the distribution of oil rent through subsidizing key commodities.

Source: The North Africa Journal February 11, 2018 15:56 UTC