Annual Report of the Bank of Algeria 2023: An Analysis of Economic Resilience and Challenges Ahead

✏️ BY: Dr. Hana Saada

Algiers, Algeria | August 13th, 2024 — The Bank of Algeria’s 2023 Annual Report offers a detailed examination of the country’s economic performance over the past year, showcasing resilience amidst global challenges and setting the stage for future prospects. The report underscores a year marked by notable recovery and growth, yet highlights ongoing challenges that need addressing as Algeria looks forward to 2024.

Economic Growth Amidst Global Challenges

The Algerian economy ended 2023 on a strong note, achieving a growth rate of 4.1%, the highest since 2015. This positive development follows the severe downturn experienced in 2020. The growth was propelled primarily by the extractive industries sector, which saw a significant 4.8% increase, alongside a 3.7% expansion in the construction sector. Despite global economic turbulence, Algeria managed to lower inflation from 9.29% to 7.84%, thanks to effective policies by the Bank of Algeria (BA), such as a competitive key interest rate and the appreciation of the dinar. These measures have bolstered household purchasing power and supported consumer spending.

The Crucial Role of the Bank of Algeria

The BA played a central role in maintaining financial stability by ensuring a stable key interest rate and bolstering liquidity reserves, which helped preserve investor confidence. The banking sector exhibited resilience, with improved solvency ratios and prudent management of non-performing loans. This stability resulted in a second consecutive year of a surplus in the balance of payments, and foreign exchange reserves saw a significant increase, strengthening Algeria’s external financial position. However, the country faces ongoing challenges, including a growing budget deficit driven by increased public spending. Although non-hydrocarbon revenues are rising, they are not yet sufficient to reduce the economy’s dependency on oil revenues, highlighting the urgent need for revenue diversification.

Growth and Structural Challenges

Professor Nazim Sini, an economics professor and political analyst, has provided a detailed analysis of the BA’s annual report. He notes that while the report reflects a rebound in economic indicators in 2023, such as a slight decrease in inflation compared to 2022, challenges remain. The growth, though positive, is not sufficient to meet the standards required for significant economic absorption, such as reducing unemployment. Although the balance of payments continued to show a surplus, its amount was halved, and while foreign exchange reserves increased, the budget deficit doubled. Sini warns that without careful management, the deficit could become unmanageable, stressing the importance of controlling public spending to avoid long-term fiscal imbalances.

Future Challenges and Recommendations

Looking ahead to 2024, Sini emphasizes that the Algerian economy must address several key challenges. These include bringing inflation down to below 5%, reducing the money supply, increasing the key interest rate, and providing adequate financing to support investment. Improving the balance of payments will also be crucial. Whether the current economic momentum represents a genuine recovery or merely a temporary rebound will depend on how effectively these challenges are managed.

Translated from: 

https://www.horizons.dz/?p=150933

About Dzair Tube Media Group

Dzair Tube has firmly positioned itself as a leading force in Algerian digital journalism, delivering a rich and diverse array of content. Available in Arabic, French, and English, Dzair Tube captivates a broad audience, drawing over half a million daily clicks.

The platform’s excellence was notably recognized with the prestigious President of the Republic’s Award for Professional Journalist in the Electronic Press category on October 22, 2022. This accolade underscores Dzair Tube’s steadfast commitment to the highest journalistic standards.

Dzair Tube’s substantial online footprint includes 350,000 YouTube subscribers, over six million followers across various Facebook pages, and 450,000 Instagram followers. The digital channel serves as a nexus for a wide range of programming, spanning news, sports, entertainment, culture, and religion, catering to a diverse audience.

Boasting cutting-edge studios and advanced technology, Dzair Tube’s digital channel has attracted a significant viewership with its varied programs. It facilitates interactive discussions with key figures from various sectors, promoting public discourse and engagement. Beyond news, Dzair Tube excels in producing marketing documentaries, short TV commercials, and high-viewership shows.

The print edition of Dzair Tube’s sports newspaper, “Dzair Sport,” further attests to the platform’s influence, with over 50,000 daily downloads from the official Dzair Tube website.

Awarded the Media Leadership Award by the Minister of Communication, Mohamed Laâgab, Dzair Tube continues to shape the Algerian digital media landscape, maintaining its position of influence and impact. Additionally, Dzair Tube’s prominence in Algeria’s media scene was celebrated at the ninth edition of the “Hilals of the Television” competition, solidifying its status as a media leader.

Stay Connected with Dzair Tube