世界发展银行-Algeria-Economic-Monitor,-Spring-2021---Accelerating-Reforms-to-Protect-the-Algerian-Economy_72页_2mb

Algeria Economic Monitor Summary

Core Content

The Algeria Economic Monitor published in Spring 2021 analyzes the economic developments and challenges faced by Algeria in the wake of the COVID-19 pandemic. It highlights the impact of both non-pharmaceutical interventions (NPIs) and the decline in hydrocarbon revenues on the country's economy, as well as the long-term implications for economic recovery, inequality, and the health system.

Main Points

Economic Developments in 2020 and Early 2021

• Dual Shocks: The combination of strict NPIs and a sharp drop in hydrocarbon revenues significantly worsened Algeria's economic situation.
• GDP Contraction: Algeria's GDP contracted by 5.5% in 2020, with signs of recovery emerging in the second half of the year.
• Sectoral Impact: Smaller firms, those in the informal sector, and industries such as services and construction were more severely impacted.
• Fiscal and External Challenges: The budget deficit expanded due to falling oil and tax revenues, while public spending increased. The current account deficit also widened, leading to import compression and a decline in foreign exchange reserves to around 12.8 months of imports.
• Monetary Policy: Despite monetary easing, banking liquidity fell and credit growth slowed. The Algerian dinar depreciated significantly in 2020, with inflation rising in early 2021.

Economic Outlook and Risks

• Fragile Recovery: The economic outlook for 2021 is described as fragile, with GDP expected to grow by 3.7% in 2021 and 2.5% in 2022.
• Hydrocarbon Recovery: A rebound in gas production is expected in 2021, but non-hydrocarbon sectors will recover slowly.
• Fiscal and External Needs: Fiscal and external financing requirements remain high, at 18% and 10% of GDP, respectively.
• Key Risks: Risks to the economic outlook include worsening public health conditions, resumption of large-scale social mobilization, lower-than-expected foreign exchange revenues, and insufficient private sector response to reform efforts.

Impact of COVID-19 on Inequality

• Inequality Widening: The pandemic has exacerbated economic inequality, particularly affecting low-skilled workers and vulnerable households.
• Labor Market Effects: The number of registered job seekers increased by 29%, with a 504,400 rise between March 2020 and March 2021.
• Informal Sector Vulnerability: Households in the informal sector, lacking social protection, experienced a stronger deterioration in living standards.
• Gender Disparities: Over 50% of working women are in the health and social services sectors, making them particularly vulnerable to the economic and health impacts of the pandemic.
• Need for Targeted Support: To ensure an inclusive recovery, targeted compensation mechanisms are needed to protect the most vulnerable.

Health System Challenges

• Health System Strain: The pandemic exposed the limitations of Algeria's health system, including resource shortages and inequitable access.
• Health Outcomes: While life expectancy and NCD control are comparable to peer countries, maternal and child health outcomes lag behind other upper-middle-income economies.
• Financing Issues: High public financing and low out-of-pocket spending are features of the system, but equitable distribution of health financing remains a challenge.
• Need for Reform: A reform of the health system is necessary to address double burdens of communicable and non-communicable diseases, and to enhance resilience and inclusivity.

Key Information

• Data Sources: The report references night-time lights data, Business Pulse Survey (BPS), and data from the Agence Nationale de l'Emploi (ANEM).
• Policy Recommendations: The report emphasizes the need to accelerate reforms to promote private sector growth, restore macroeconomic balances, and reduce inequality.
• Importance of Digital Tools: Digital tools are highlighted as a means to support an inclusive and resilient recovery.
• Health System Strengthening: The health system requires equitable financing, improved resource allocation, and capacity building to meet future challenges.

Conclusion

The Algeria Economic Monitor underscores the fragility of the economic recovery and the urgent need for structural reforms. It stresses that vulnerable households and the health system must be prioritized in the recovery process to ensure sustainable and inclusive growth. The reform agenda must be accelerated to reduce reliance on hydrocarbon revenues and foster a more resilient economy.