(MENAFN) Algeria, which oil revenues make up 97 percent of its hard currency earnings and 60 percent of the government's budget, is beginning to feel the impact of the fall in oil prices that led it to lose almost 50 percent of its value and reach its five-year low, Arab News reported.
According to the International Monetary Fund's latest report on Algeria, the country's growth for this year is estimated to be 4 percent, but that due to the declining oil production and lower prices, Algeria's imports will exceed its exports this year for the first time in 15 years.
These worries have also grown after the country's Central Bank issued a warning saying that the oil and gas dividend won't last forever, despite the country currently having USD200 billion of foreign reserves, but that this sum can only help cushion the blow in the short-term.
"This capacity to resist such shocks will disappear quickly if the price of oil stays at a low level for a long time," he told parliament recently, deploring the economy's continued dependence on oil," Algeria's Central Bank Governor said.
The Central bank said that one of the ways to deal with problem is to scale back on the generous subsidies, which amount to 21 percent of the country's annual economic output, that are offered to the people including the subsidies electricity, many food products and its gasoline, as well as education and housing.
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