Moody's warned that the political crisis in Algeria will deepen the economic and financial challenges, which would threaten the credit rating of Algeria.
The agency said that the long-term uncertainty is expected to put pressure on the country's economic prospects, which have deteriorated markedly since the oil price crisis of 2014, with Algeria's budget deficit increasing to more than 15 percent of GDP after oil prices collapsed in 2014. The government refrained from implementing tough fiscal reforms that would have allowed the country to adjust to the falling crude prices, fearing the popular outrage.
The budget deficit remains at an estimated 7% of GDP in 2018 despite the recent high oil prices.
Moody's said that the decline in oil production associated with the postponement of some investment projects, had begun to negatively affect the growth as long-term political tensions were likely to exacerbate the slowdown. Noting that Algeria's production of oil and gas, according to "Moody's" was not affected by the unrest in the country.
Source: (Asharq Al-Awsat newspaper, Edited)
