Country Report Algeria January 2009

Outlook for 2009-10

• The president, Abdelaziz Bouteflika, will stand for a third term in April 2009 following several amendments to the constitution that were approved by parliament in November. He is likely to win the election by a large majority.
• The threat to general security from the militant Islamist insurgency is likely to remain high in the near term, following a recent increase in bomb attacks against official targets. This is not likely to affect overall political stability.
• Fiscal policy will remain strongly expansionary, but low average oil prices in 2009-10 are now forecast to lead to a central government budget deficit in both 2009 and 2010.
• Domestic demand will remain robust, but an expected slowdown in investment and exports has led us to cut our forecasts for real GDP growth to 3.1% in 2009 and 5.1% in 2010, insufficient to reduce unemployment.
• The Algerian dinar is likely to depreciate on average against the US dollar in 2009-10. Against the euro, the dinar is forecast to appreciate in 2009.
• Lower oil prices will lead to a sharp drop in Algeria's trade surplus, to around US$15bn in 2009 from an estimated US$40bn in 2008. This will result in a concomitant reduction in the current-account surplus.

Monthly review

• Some candidates for the presidential election in April 2009 have come forward, despite complaints in the opposition press that there has been no genuine political debate concerning the election.
• Local analysts have expressed the concern that the absence of a real debate could lead to a record-low turnout at the election.
• There has been a fall in the death toll from politically motivated violence.
• The government has presented an "action plan" to speed up the implementation of its five-year infrastructure programme in order to boost economic activity.
• Foreign-exchange reserves were US$138bn at end-November according to the prime minister, Ahmed Ouyahia.
• Algeria's trade surplus was US$39.77bn in the first ten months of 2008, compared with US$26.07bn for the same period in 2007 according to figures from the Centre national de l'informatique et des statistiques des douanes.
• The result of Algeria's seventh international oil and gas licensing round was disappointing. When bids for the remaining 15 blocks were opened on December 13th 2008, just nine bids were tendered for a total of four blocks.

Source: Country Report

This report covers the following industry codes:
SIC Code: 60;59;39;37
NAICS Code: 52;44;31;336