Algeria to cut spending by 9 % next year over oil price slump

Algeria to cut spending by 9% next year over oil price slump

ALGIERS  – Algeria’s government said on Saturday it will cut spending by 9 percent next year due to the drastic fall in global oil prices as the OPEC petroleum and gas producer tries to counter the drop in energy revenues that account for 60 percent of its budget.

Algeria still has more than $150 billion in foreign reserves and little foreign debt, but it relies heavily on its oil and gas revenues for a vast welfare programme for everything from housing to subsidised electricity, food and fuel that have helped ease social tensions in the past.

The government had already announced a cut of 1.3 percent cut in this year’s budget after it said the fall in world crude prices would slash its energy earnings by 50 percent.

“We need courageous decisions for 2016, so we have decided on a 9 percent cut in the budget,” Prime Minister Abdelmalek Sellal told a meeting of local government officials, state media reported.[pro_ad_display_adzone id=”70560″]

“We need to reduce the number of big infrastructure projects, but we need to continue with those we have already launched.”

Echoing past government announcements that the oil price drop will not affect public subsidies, Sellal said the 2016 cutbacks would not impact housing, health or education.

He said the government still expects the OPEC member’s economic growth at 4.6 percent in 2016, compared with an expected 4 percent for 2015.

Such economic decisions come at a sensitive time for Algeria’s leadership. Ageing President Abdelaziz Bouteflika has rarely been seen in public besides brief television appearances since a stroke in 2013, even after re-election to a fourth term last year.(Reuters)

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