BY: Dr. Hana Saada
ALGIERS- Following the International Monetary Fund (IMF), the World Bank, another major Bretton Woods institution, has now confirmed the beginning of a sustained downward cycle of inflationary trends in Algeria. This comes after peaks of over 9% were reached during the previous two years, largely due to the widespread increase in prices of basic commodities in the international market.
In its latest economic information bulletin on the Middle East and North Africa (MENA) region, published on Monday on its official website, the World Bank group estimated that the inflation rate in Algeria, while still high, is now evolving on a downward trend, standing at a rate of 6.4% at the beginning of 2024.
Inflation in Algeria, as in other countries in the region, analysts from the World Bank explain, “appears to be fueled by the rise in prices of food items, especially fresh produce,” a cost increase that is felt “most acutely” by “the most vulnerable segments, as food constitutes a significant portion of low-income households’ expenditures.”
In its latest report on monitoring the economic situation in Algeria, published at the end of October 2023 under the theme “Continuing the Diversification Effort,” the World Bank had already anticipated a trend of declining consumer price index, respectively to levels of 8.6% and 7.9% for the current year and the following one, compared to record rates estimated at 9.3% and 9.5% in 2022 and 2023.
Delayed Effect of Dinar Appreciation
In this regard, the World Bank specified, “recent tightening of controls on the prices of cereals and legumes may limit increases in prices of agro-industrial products…” Inflation, the international financial institution thus predicted, should “gradually decrease in 2024 and 2025, as rainfall returns to normal levels, as the growth of the money supply, public spending, and food prices on imports moderates, and due to the delayed effect of the dinar’s appreciation.”
The Algerian dinar exchange rate, which “after fourteen consecutive years of depreciation, appreciated by 6.2% against the US dollar and 4% against the euro in the second half of 2022,” before stabilizing against major strong currencies during the past year, with the Bank of Algeria seeking through this means to slow down imported inflation, according to the World Bank’s analysis.
Indeed, the share of imported inflation, or the increase in import prices, accounted for nearly 70% of the overall inflation rate observed during the past two years in Algeria, according to recent estimates from the Bank of Algeria.
As reiterated by the President of the Republic, at the end of March during his traditional televised interview with representatives of national media, the state is determined to gradually strengthen the value of the national currency as an important lever to protect the purchasing power of households, thus countering the phenomenon of imported inflation.
Ultimately, as emphasized by the head of state in the same context, inflation, whose overall level has already decreased at the beginning of this year to rates of less than 8%, will continue to be progressively curbed until it is contained below thresholds “which should not exceed 4% at most,” he stated.
This sustained disinflationary cycle is thus confirmed by the new forecasts of the World Bank, following those recently established by the other major international financial institution, the IMF, which also anticipates a gradual and continuous decline in inflationary pressures in Algeria from the current year until 2029.
In its recent report on the Algerian economy, released at the end of last March as part of its final conclusions on the consultations held in December 2023 with Algeria under Article IV of the Fund’s statutes, the IMF indicated that the inflation rate began to slow down from the current year, notably due to “the decrease in prices of fresh food products.”
According to the fund’s new projections, the average inflation rate in Algeria is expected to decrease from a level of 9.3% recorded in the past year to 7.6% this year, before declining even more significantly to 6.4% next year, 6.1% in 2026, 5.5% in 2027, then 5.2% and 5% in 2028 and 2029.
Translated from: https://lalgerieaujourdhui.dz/un-taux-de-64-en-ce-debut-dannee-la-banque-mondiale-confirme-le-recul-de-linflation-en-algerie/
About Dzair Tube Media Group
Dzair Tube has firmly established itself as a prominent player among Algerian digital news sites, offering a diverse and enriching content experience. The platform, available in Arabic, French, and English editions, captures the attention of a wide-ranging audience, amassing over half a million daily clicks.
A testament to its commitment to excellence, Dzair Tube received the prestigious President of the Republic’s Award for Professional Journalist in the Electronic Press category on October 22, 2022. This recognition underscores the platform’s unwavering dedication to upholding the highest standards of journalism.
With a significant online presence, Dzair Tube boasts 350,000 subscribers on YouTube, over five million followers on various Facebook pages, and 450,000 subscribers on Instagram. Its digital channel has become a hub for diverse programming, covering news, sports, entertainment, culture, and religion, catering to a broad spectrum of audience preferences.
Equipped with state-of-the-art studios and advanced technology, Dzair Tube’s digital channel has garnered substantial viewership for its varied programs. Hosting interactive discussions with influential figures across different domains, the platform actively fosters public discourse and engagement. Beyond news coverage, Dzair Tube extends its commitment to the production of marketing documentaries, short TV commercials, and high-viewership programs.
The success of the print edition of Dzair Tube’s sports newspaper, “Dzair Sport,” further highlights the platform’s impact, with over 50,000 daily downloads from the official Dzair Tube website.
Honored with the Media Leadership Award from the Minister of Communication, Mohamed Laâgab, Dzair Tube continues to shape the landscape of Algerian digital news, maintaining a position of influence and impact in the media industry.
