DUBAI  - Algeria needs to focus on avoiding economic instability during its political transition after the resignation of President Abdelaziz Bouteflika, a senior official at the International Monetary Fund (IMF) said.

Jihad Azour, IMF's Middle East and Central Asia director, also told Reuters the OPEC member should carry out reforms to help cut deficit and reduce reliance on oil and gas.

Bouteflika resigned on April 2 amid mass demonstrations against his two decade rule, and the protests have not stopped, with activists seeking the departure of Prime Minister Nouredibe Bedoui and interim president Abdelkader Bensalah.

Bensalah is in charge of a 90-day transition period set to end with a presidential election on July 4.

Algeria has been under financial pressure due to a fall in global oil prices since mid-2014. It has failed to diversify the economy away from crude and gas which account for 60 percent of the budget and 94 percent of total exports.

"Structural reforms will allow Algeria to diversify outside oil and to use its strengths, both in terms of a young population, geographical location and wealth it has in different sectors," Azour said.

Algeria's economy grew 2.3 percent in 2018 due to higher oil prices, up from 1.4 percent the previous year, but below a 4 percent government forecast, according to the finance ministry.

The non-energy sector grew 4 percent last year, against 2.2 percent in 2017.

The government last year started implementing changes that allow the central bank to lend directly to the treasury to fund internal public debt. The budget deficit is projected at 9.2 percent of gross domestic product for this year, up from 9 percent in 2018.

"What is important economically for Algeria is to preserve economic stability during this political transition," Azour said. There will also be a need to "anchor stability in the medium term by reducing gradually the level of the budget deficit and avoiding any monetizing of the deficit," he added.

(Editing by Ulf Laessing and Peter Graff) ((ulf.laessing@thomsonreuters.com))