Algeria Economy Articles & Analysis

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What are Algeria’s main competitive advantages, and how can its potential be unlocked?

 

Faced with slowing economic growth and an increasingly constrained banking sector, Algeria decided to change its macroeconomic strategy in October 2017. As part of the new plan, monetary and fiscal policies would be eased simultaneously, an approach which has come to be known in Algeria as “quantitative easing”. Instead of continuing to narrow...

 

The fall in oil prices from mid-2014 onwards not only heralded an economic slowdown and a sharp rise in Algeria’s twin deficits, it also called into question the longer-term sustainability of the country’s hydrocarbons-dependent development model. In July 2016 the authorities unveiled their new growth plan, a strategic vision to transform the...

 

Recent decades have seen a downward trend in corporate taxation, with headline corporate tax rates falling by 20 percentage points since the early 1980s. The average for advanced economies dipped to 22% in 2015, and investment incentives have further reduced effective rates for transnational corporations. After the 2007-08 global financial...

 

With the import ban launched in 2016 having coincided with a drop in energy prices, in early 2018 Algeria started to rethink, with a view at improving the country’s finances and easing a challenging tax situation. In June 2018 Parliament duly approved a measure replacing the ban on certain products with Customs duties.

 

One of the most important budgetary reforms to be introduced in Algeria in recent years was the promulgation of the Organic Finance Law on Finance Laws in August 2018. Annual finance laws from 2021 will be prepared under procedures and parameters set out in the new Organic Law. Requiring several years before it is fully implemented, the...