Algeria: Selected Issues

International Monetary Fund

No 2016/128, IMF Staff Country Reports from International Monetary Fund

Abstract: This paper develops a structural macroeconomic model for Algeria that can help inform the discussion of the policy choices faced by the authorities. The model captures the core dynamics of Algeria’s macro-economy and provides an organizing framework for forecasting and policy analysis that can facilitate an assessment of the optimal policy responses to oil shocks and the implications for macroeconomic stability. This paper also examines Algeria’s main subsidies and proposes reform strategies, drawing on cross-country experiences, and discusses the channels through which a prolonged period of low oil prices may affect the banking sector, together with the policies needed to mitigate emerging financial stability risks.

Keywords: ISCR; CR; subsidy; price; subsidy reform; sequence price; exchange rate depreciation; oil price shock; market import price; import price Phillips curve; price fluctuation; fiscal consolidation strategy; breakeven price; rating methodology; asset quality; Oil prices; Inflation; Energy subsidies; Commercial banks; Consumption; Global; Middle East and Central Asia; Middle East; North Africa; East Africa (search for similar items in EconPapers)
Pages: 67
Date: 2016-05-18
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