CONTENT PREVIEW
Country Risk

Algerian government policies likely to postpone, rather than mitigate, unrest until 2019 election year

20 October 2017

Key Points

  • The provisions of the Finance Law and the Money and Credit Act indicate the government’s unwillingness to implement austerity measures or structural economic reforms to address Algeria’s serious budgetary shortfalls.
  • Instead, the new policies mark a renewal of government efforts to encourage increased domestic and foreign investment, which is, however, unlikely to materialise in the one-year outlook.
  • Although ‘unconventional funding’ will postpone the risk of widespread economically motivated unrest, the government is unlikely to be able to sustain the social spending required to mitigate this risk, particularly during the 2019 presidential election period.

Event

The newly formed government of Prime Minister Ahmed Ouyahia has adopted two keynote policies, the 2018 draft Finance Law on 4 October, and the amended Money and Credit Act, on 11 October 2017.

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