ALGERIA

The Algerian government is struggling to develop a new economic plan after its foreign reserves declined US$35 billion last year to US$143 billion, while the fiscal deficit nearly doubled to 16 per cent of GDP on lower hydrocarbon revenues.

“Algeria faces important challenges, with the large decline in oil prices expected to be sustained over the medium term. In response, the authorities have begun to undertake fiscal consolidation and implement selected reforms,” the International Monetary Fund said in a report. “These efforts need to be intensified.”

The OPEC member produced 1.11 million barrels per day in February.

High oil prices are a key tool for the regime led by Abdelaziz Bouteflika to control its restive population and rule the country with an iron fist. In the past, the government has paid lip service to economic and social reforms, but a continued crisis may force the government to loosen its tight grip on the economy.

“Algeria is also facing renewed terrorist threats, as evidenced by the recent Al Qaeda rocket attack on the Krebcha gas plant, which prompted BP and Statoil to withdraw its Algerian based staff,” RBC said.

Oil breakeven price: US$114.8 per barrel