As Algerian oil is verging on $100: Economic growth to speed up the pace

Growth in Algeria is expected to accelerate further in 2024, at a sustained pace over the past two years, reflecting not only the current rise in oil prices but also the expected consolidation of the performance of the main non-hydrocarbon economic sectors.

Indeed, the Sahara blend, Algeria’s benchmark crude oil, which price increased by an additional premium over the North Sea Brent, to which it is indexed, is now expected to exceed $100, giving Algeria more comfortable wiggle room to consolidate its external financial equilibrium and the overall pace of economic growth.

Brent crude, the benchmark for Algerian oil prices, closed last week at $95 per barrel. And, according to market analysts, that trend will continue, with global oil supply tightening further in response to renewed growth in demand, especially in China and the United States – the two main forces driving the global economy.

These are very favorable signals for the Algerian economy, which will have to perform better in 2024, mainly by consolidating the positive balances of its trade and payments balances and by strengthening its official foreign exchange reserves, currently valued at nearly $85 billion, which is sufficient coverage for more than two years of imports of goods and services.

This expected consolidation of the macroeconomic and macro-financial balances should also serve as the basis for an acceleration in the pace of growth of the national economy, which should thus be boosted both by its traditional relays in the oil and gas sectors, but also and above all by the continuation of the efforts undertaken in the non-hydrocarbon sectors, especially agriculture and industry with its various branches.