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In 2007, the energy sector accounted for 97% of Algeria’s goods exports, 81% of fiscal revenues and 46% of total economic output. High oil and gas prices have endowed Africa’s third-largest economy with a surge in revenues and, thus, the means to start anew and run down debt. Algeria is now in the process of healing old wounds and joining the league of internationally important business partners.
Market-oriented reforms launched by Algeria over the past few years are beginning to bear fruit. Following a sharp slowdown in growth in 2006, Algeria managed to turn around its economy in 2007 and achieve robust expansion of 5% or so, which was mainly attributable to the non-energy sector. Government investment, especially in housing and infrastructure, was the main driver. Similar growth rates are expected this year.
Last year, the inflation rate remained firmly anchored in the single-digit range, at 3.5%.
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