Inflation is a snake that continues to mutate in Algeria. Sometimes dormant, sometimes active, this economic phenomenon has recently shown its capacity to come back to haunt Algerian homes. While October had suggested a slight stabilization of prices, the month of November marked a new rebound.
According to the latest bulletin from the National Statistics Office (ONS), the raw consumer price index of the city of Algiers recorded an increase of 0.5% in November 2023 compared to the previous month. This alarming news confirms that the fight against inflation is far from won in Algeria, with an annual rate reaching a staggering rate of +9.4%.
Inflation with many faces
Algerian inflation manifests itself in a heterogeneous manner, affecting various categories of consumer goods. Food products experienced an increase of 0.2%, mainly attributable to the increase in prices of fresh agricultural products, recording a rate of +0.5%. However, vegetables saw a decline of almost 17.4% during November. On the other hand, other products saw their prices skyrocket: chicken meat showed an increase of 15.8%, potatoes 12.7%, and fish 12.4%.
Industrial food goods, for their part, recorded a slight decrease of 0.1%, while manufactured products experienced an increase of 0.9%. Compared to November 2022, the prices of food goods show an overall increase of 12.3%. Fresh agricultural products stand out with an explosion of 19.5%, reaching a rate of 56.5% for chicken meat and +27.6% for sheep meat and offal. Industrial food products follow the trend with an increase of 4.9%, notably coffee, tea, and infusions, showing an increase of 18.2%. These figures thus contradict government forecasts which predicted inflation oscillating between 7% and 8% for the year 2023.
The factors of inflation
Several factors contribute to this persistent inflation in Algeria. The first explanation lies in the country’s dependence on imports of many everyday consumer products, exposing the national economy to variations in international prices. The surge in prices of raw materials, particularly oil and cereals, has a direct impact on production costs and, consequently, on consumer prices.
Algeria’s political and social instability also has a detrimental effect on price stability. Protests, strikes, and government upheaval have created a climate of uncertainty that discourages investors and hampers economic growth. The resulting insecurity impacts national production and, consequently, the supply of goods.
In addition, dysfunctions in distribution and the supply chain have amplified the pressure on prices. High transportation costs, delays in product delivery, and temporary shortages contribute to creating upward pressure on prices.
Impacts on the population
Inflation in Algeria has devastating repercussions on the population. Algerian households are seeing their purchasing power reduced while soaring prices make it increasingly difficult to meet their basic needs. Necessities, such as food, housing, and healthcare, are becoming unaffordable for many citizens.
Workers are also being hit hard as wage increases fail to keep pace with the breakneck pace of inflation. Strikes and wage demands are increasing, fueling a tense and uncertain social climate.
The quest for solutions
To effectively combat inflation, Algeria must take bold and coordinated measures. It is essential to diversify the economy by reducing dependence on hydrocarbons, boosting domestic production, and encouraging foreign investment.
The Algerian government must also work to restore political and social stability, by responding to the aspirations of the population and implementing structural reforms to promote economic growth.
Finally, efforts must be made to improve distribution and supply chain management, reducing transportation costs and ensuring constant availability of essential products.
Inflation in Algeria is a major economic challenge that affects the daily lives of citizens. Soaring prices endanger purchasing power and create social tensions. To meet this challenge, Algeria must diversify its economy, restore political stability, and improve supply chain management. Only a concerted effort will bring this insidious inflation under control and pave the way for a more stable and prosperous economic future for the country.
