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© 2003 International Monetary Fund

March 2003

IMF Country Report No. 03/69

Algeria: Selected Issues and Statistical Appendix

This Selected Issues paper and Statistical Appendix for Algeria was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with the member country. It is based on the information available at the time it was completed on January 29, 2003. The views expressed in this document are those of the staff team and do not necessarily reflect the views of the government of Algeria or the Executive Board of the IMF.

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INTERNATIONAL MONETARY FUND

ALGERIA

Selected Issues and Statistical Appendix

Prepared by Michel Lazare, Philippe Callier, Khanjar, Wabel Abdallah, and Taline Koranchelian (all MED)

Approved by the Middle Eastern Department

January 29, 2003

Contents

• I. Overview

• II. The Sources and Institutional Underpinnings of Sustained Growth in Algeria

  • A. Why is Growth in Algeria so Low?

  • B. The Environment for Economic Growth in Algeria

  • C. Institutional and Structural Reforms in Algeria

  • D. Conclusion

• References

• Tables

• 1. Growth Accounting, 1965–2000

• 2. Public Enterprise Sector, 1989–2000

• 3. Country Ranking of Selected Indicators of Attractiveness for Foreign Direct Investment

• Figures

• 1. Evolution of GDP, Physical Capital, Labor, and Human Capital, 1965–2001

• 2. TFP Evolutions 1965–2000 (three-year moving averages)

• III. Money Demand and Monetary Policy: Evidence from Algeria

  • A. Introduction

  • B. Background and Features of Algeria’s Monetary Policy

  • C. The Demand for Money and Oil Shocks to the Monetary Equilibrium

  • D. Monetary Policy Instruments in the Wake of Oil Price Shocks

  • E. Conclusions and Recommendations

• References

• Tables

• 4. Statistics for ADF (2) Unit Root Tests

• Figures

• 3. Fitted and Actual Real M2, 1974–2001

• 4. Actual and Fitted Changes in Inflation, 1982–2001

• Appendices

• 1. Weak Exogeneity Test Statistic

• 2. Model Stability Tests

• Statistical Appendix Tables

• 1. Supply and Use of Resources at Current Prices, 1997–2001

• 2. Sectoral Distribution of GDP at Current Prices, 1997–2001

• 3. Sectoral Distribution of Real GDP Growth, 1997–2001

• 4. Production, Exports, and Consumption of Petroleum Products, 1997–2001

• 5. Production, Exports, and Consumption of Gas Products, 1997–2001

• 6. Domestic Prices of Major Energy Products, 1997–2001

• 7. Land Use Patterns, 1997–2001

• 8. Crop Yields, 1997–2001

• 9. Livestock, 1997–2001

• 10. Index of Industrial Production in Public Enterprises, 1997–2001

• 11. Production of Minerals, 1997–2001

• 12. Consumer Price Index, 1997–2001

• 13. Income of Households, 1997–2001

• 14. Labor Force, Employment, and Unemployment, 1997–2001

• 15. Summary of Central Government Operations, 1997–2001

• 16. Composition of Central Government Revenue, 1997–2001

• 17. Central Government Revenue, 1997–2001

• 18. Composition of Central Government Expenditure, 1997–2001

• 19. Central Government Expenditure, 1997–2001

• 20. Sectoral Allocation of Budgetary Capital Expenditure, 1997–2001

• 21. Central Government Domestic debt, 1997–2001

• 22. Housing Supply, 1997–2001

• 23. Monetary Survey, 1997–2001

• 24. Balance Sheet of the Bank of Algeria, 1997–2001

• 25. Distribution of Credit to the Economy by Maturity, 1997–2001

• 26. Distribution of Credit to the Economy by Sector, 197–2001

• 27. Structure of Interest Rates, 1997–2001

• 28. Expansion of Banks’ Network, 1997–2001

• 29. Balance of Payments, 1997–2001

• 30. Breakdown of Imports and Exports, 1997–2001

• 31. Volume of Hydrocarbon Exports, 1997–2001

• 32. Exports of Hydrocarbons, 1997–2001

• 33. Trade Indices, 1997–99

• 34. External Debt, 1997–2000

• 35. Stock of External Debt, Disbursement of Loans and Debt Service by Creditor

• 36. Nominal and Real Effective Exchange Rates, 1990–2001

• Summary of the Tax System

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INTERNATIONAL MONETARY FUND

ALGERIA

Selected Issues Supplemental Information

Prepared by Khanjar Wabel Abdallah, (MED)

Approved by the Middle Eastern Department

February 7, 2003

Contents

• I. Key Features of the Algerian Labor Market

  • A. Background

  • B. Labor Force Dynamics

  • C. The Structure of Unemployment

  • D. The Informal Sector

  • E. Wage Trends

• II. Policy Responses and Remaining Challenges

  • A. Policy Responses

  • B. Remaining Challenges

• Tables

• 1. Labor Force and Unemployment, 1990–2001

• 2. MENA-Comparative Employment Elasticity, 1990–2000

• 3. Evolution of Employment Regulation Schemes, 1997–2001

• Figures

• 1. Growth of Labor Force and Unemployment, 1990–2001

• 2. Unemployment Rate by Age Group, September 2001

• 3. General Civilian Government Employment and Wage Bill as Share of GDP in Algeria, Morocco, Tunisia, and Egypt