Algeria’s National Statistics Office and the IMF are predicting years of rising inflation
Rabat – Algeria is struggling to contain a rising inflation that is set to continue until 2023, even as record-low food prices continue to balm the national mood. In its latest official bulletin, released on Thursday, the country’s National Statistics Office (ONS) indicated that Algeria’s annual inflation rate was 2.3% by the end of November.
Algeria’s rising inflation rate is impacting consumer prices. In 2020, consumer prices have risen by 2.3% amid economic hardship caused by the COVID-19 pandemic and its economic fallout.
The International Monetary Fund (IMF) expects inflation in Algeria to further rise in coming years. According to the IMF, the country’s inflation rate could rise to 5.9% in 2021, a number that surpasses the forecasts of Algeria’s 2021 finance bill that predicts a 4.5% inflation rate. Both the Algerian government and the IMF do not expect a significant rebound in consumer prices until 2023.
One of the reasons for Algeria’s rising inflation rate is the performance of its national currency. The Algerian dinar is set to fall at an average annual rate of 5% by 2023. Algeria’s dinar continues to depreciate, with the country’s finance bill expecting an exchange rate of 156.78 Algerian dinars for one US dollar in 2023.
The IMF expects Algeria to see a 5.5% decrease in its GDP and a 3.5% increase in consumer prices in 2020.
One bright spot in Algeria’s financial woes comes in the form of falling prices for food.
The COVID-19 crisis has increased unemployment and a fall in living standards, yet food prices have decreased to provide some relief. Fruit prices have decreased by 1.9%, while vegetable prices have decreased by 15,7%. At the same time, chicken has become 9.9% cheaper and the price of eggs has fallen by 2.3%, according to Algerian newspaper Liberte Algerie.
Algeria’s economic troubles are worsened by the absence of the country’s president from the Mouradia Palace.
President Tebboune reappeared for the first time since his diagnosis in a speech published on Twitter on December 13. The speech aimed to dispel rumors that the president was incapacitated or even dead, yet it failed to address the country’s crises. For Algerian economist Smain Lalmas, President Abdelmadjid Tebboune’s prolonged absence has played a key role in Algeria’s current crises.
Tebboune’s speech was “completely out of step with the country’s emergencies,” Lalmas told Liberte Algerie. “Instead of reassuring, his appearance had the opposite effect on a population legitimately distressed by the uncertainty as to the national future,” Lalmas stated.