The Algerian economy has had a very difficult year 2020, in particular, because of the fallout from the Covid-19 pandemic.
It has been hard hit by the fall in oil prices to unprecedented levels, the continued melting of foreign exchange reserves, and the fallout from the health crisis which has forced the slowdown or shutdown of entire sectors of activity. economic.
At the end of 2020, hydrocarbon revenues stood at $ 22 billion. At the start of last March, foreign exchange reserves were only $ 42 billion.
This situation had undeniable repercussions on public procurement, the availability of certain products due to restrictions on imports, and even on employment.
On the other hand, at the macroeconomic level, and compared to its neighbors, Morocco and Tunisia, Algeria maintains its resilience, even if the main indicators have not been spared by the consequences of the crisis.
In any case, it does better than its immediate neighbors. The finding is taken from the latest economic newsletter of the World Bank for the Middle East North Africa (MENA) region which includes data on the public debt of the States of the region.
“ Maintaining high debt could present long-term risk, threatening the solvency of economies and their ability to refinance (or rollover) debt maturing in the future. These risks, if they materialize, can lead to economic hardship characterized by devaluation of currencies, rampant inflation, capital flight, and, ultimately, severe debt crises. Lebanon’s default in March 2020 and the current crisis are painful examples, ”warns the World Bank.
We learn from the report that Algeria’s public debt stood at 51.4% of the country’s Gross Domestic Product (GDP) in 2020, an increase of 5.8 points compared to 2019 when it stood. established at 45.6% of GDP. Of course, the bulk of Algerian debt is monopolized by public domestic debt (50.8% of GDP in 2020, 45% in 2019). External debt remains insignificant with the rate unchanged at 0.6% of GDP.
Algeria less impacted than Tunisia and Morocco
Comparison with Morocco and Tunisia shows that Algerian debt is the lowest in the region. Both countries saw their debt increase more significantly during the same period.
Morocco’s public debt stood at 77.8% in 2020, against 64.9% in 2019. Its domestic public debt represented 58.4% of GDP in 2020, while its public external debt stood at 19.4% the same year.
For Tunisia, the situation is even more gloomy with public debt at 87.2% of GDP in 2020, up 15.4 points compared to the previous year when it stood at 71.8% of GDP.
Tunisia’s internal public debt represented 27.9% of GDP in 2020, against 22.3% in 2019. For its part, the public external debt of the eastern neighbor stood at 59.3% of GDP in 2020. It represented 49.5% of GDP in 2019.
The impact of the crisis on growth was also less on Algeria, whose real gross domestic product (real GDP) contracted by 5.5% in 2020, mainly due to the Covid-19 pandemic having caused a collapse in oil prices last year.
The figure may seem high, but the growth of Morocco and Tunisia had the worst year with a contraction of -7 and -8.8% respectively.
The two countries should nevertheless experience better growth during the current fiscal year, according to forecasts by the World Bank. While Algeria’s real GDP is expected to grow 3.6%, Tunisia and Morocco are expected to experience growth of 4 and 4.2% respectively.
In 2022, growth should slow down for the three countries (3.5% for Algeria, 3.7% for Morocco, and only 2.6% for the Tunisian economy). For the whole Mena region, the expected growth next year is 2.2%
