The Algerian Government is preparing a revised budget for this year based on an average crude oil price of $19/B, $4 higher than the initial projection, Finance Minister 'Abd al-Latif Benachenhou told Reuters on 11 April during a meeting of Arab finance ministers in Fes, Morocco. The government had already approved in November a budget projected at $15/B, which estimated a deficit of AD220bn ($3.38bn), or 6.28% of a forecast gross domestic product (GDP) of AD3,500bn ($53.8bn). Government spending is expected to increase to AD1,252bn ($19.3bn) from nearly AD1,099bn ($16.9bn) in 1999. In addition, foreign debt reached AD2,080bn ($32bn) by the end of 1999, while in 1998 it stood AD2,238bn ($34.4bn).

According to a report published by the National Economic and Social Council (CNES), Algeria’s economic growth rate slowed in 1999, despite the increase in the price of oil. The report cites state companies’ poor financial health and the large increase in national debt as two factors behind the country’s poor economic performance. The budget deficit reached only AD16.5bn ($253mn) rather than the initially expected AD72bn ($1.1bn), accounting for 0.5% rather than 3.5% of GDP. The report attributes this to a 27% increase in Sonatrach’s export earnings in 1999.

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