The economy of Algeria remains vulnerable to energy prices
Algeria is a major hydrocarbon producer, accounting for 2.1% of the world’s oil and 2.5% of its natural gas production, and the economy is vulnerable to changes in global energy prices. More than 50% of the government’s revenue is currently derived from the hydrocarbon sector, and oil and gas account for around 97% of total exports.
Like other resource-rich countries, Algeria faces the challenge of transforming finite commodity resources into other drivers of growth to support sustainable development and preserve intergenerational equity. The country has accumulated substantial fiscal and external buffers to date, but the time horizon for oil and gas production is relatively short, and it is questionable whether the current fiscal stance is sustainable in the long run. The IMF recently advised the government to adopt a rules-based fiscal framework to manage hydrocarbon wealth in order to address this issue.
Source: Goldman Sachs, The world cup and economics 2014