Finance Minister Abderrahmane Raouya presented a Bill on Finance (PLF) 2019 in a plenary session led by Mouad Bouchareb in the National People's Congress (NPC) on Sunday, attended by members of the government.
The draft law provides for a growth of 2.9% for the financial year 2019, compared with 3.2% without hydrocarbons. It was developed based on the reference price of $ 50 / barrel of Algerian oil "Sahara Blend" and based on the market price of $ 60.
As for the Algerian dinar exchange rate, it should be around 118 dinars / dollars, the average annual price for 2019-2021 with inflation of 4.5% in 2019 and 3.9% in 2020 and 3, 5% per year 2021.
Expectations for a 1% drop in the volume of oil exports to $ 33.2 billion in 2019 are expected to increase in the volume of minerals (4.7%), industry (5%), agriculture (3.7%) and market and non-market services 1.8%).
In the medium term, economic growth will increase to 3.4% in 2020 and 3.2% in 2021 with average non-hydrocarbon growth by 3.1% in 2020-21, according to the PLF forecasts. also increasing the volume of hydrocarbon exports by 4.2% in 2020 with revenues estimated at $ 34.5 billion and 2% in 2021, with revenues of $ 35.2 billion.
Foreign reserves to less than $ 62 billion in 2019
To reflect the measures taken by the government to regulate imports, the law sets, as Raouya says, a decline in imports of goods to $ 44 billion in 2019, $ 42.9 billion in 2020 and $ 41.8 billion in 2021.
As a result, the trade deficit is gradually decreasing from $ 10.4 billion in 2019 to $ 8.2 billion in 2020 and $ 6.4 billion in 2021.
For the period 2019-2021, PLF predicts a steady decline in the balance of payments, which should increase from $ 17.2 billion in 2019 to $ 14.2 billion in 2020 and then $ 14 billion in 2021.
This decline will lead to a decline in foreign exchange reserves to $ 62 billion in 2019, then to $ 47.8 billion in 2020 and then $ 33.8 billion in 2021.
In 2019, the PLF predicts a 10.9% drop in capital spending and an 8.1% increase in operating costs, resulting in a 10.4% government deficit deficit in relation to gross domestic product (GDP) (against -11% in the year 2018).
Of the total estimated expenditure of 8,557.2 billion DA, the financial statements anticipate an increase in operating costs of 4,954.5 billion DA in 2019 (+ 8.1%) compared to capital expenditure estimated at 3,602.7 billion DA (-10 , 9%).
The budget revenue forecast for 2019 is 6 507.9 billion DA, of which 2 714.5 billion DA from the oil tax included in the budget.
Oil tax is expected to reach 3,201.4 billion DA in 2019.
However, the expected treasure deficit in relation to gross domestic product (GDP) is projected by the Treasury to fall to -5.7% in 2020 and to -5% in 2021.
Funding the Treasury's deficit between 2019 and 2021 "will be a certain pressure, despite the use of unconventional funding and withdrawal from the FRR over this period."
The need for unconventional funding, however, will "drop" to reach -1,874.4 billion DA in 2019, -746.5 billion DA in 2020 and -796.5 billion DA in 2021, the minister said.
The legislative provisions in the draft law are aimed at improving state revenues, coordinating and simplifying procedures, combating corruption and tax evasion, in addition to encouraging and supporting productive investment and improving bank interest rates for the benefit of citizens.
The wording is an extension of the state's efforts to mitigate the negative impact of the recession of financial resources on the national economy in a context that is manifested by tensions on the internal and external balance of the country due to the decline in oil prices.
To this end, the law deals with the monitoring of public expenditure control in order to reduce the impact of these tensions on the Treasury.
At the end of the presentation of the Minister, the rapporteur of the Committee on Finance and Budget, read the committee's preliminary draft report before the debates began.
The Minister will respond to Monday's concerns about the bill, which will be voted on by the Lower House of Parliament on Thursday.