Abstract
This 2011 Article IV Consultation reports that despite an uncertain international economic environment, the Algerian economy has been doing relatively well. Real nonhydrocarbon GDP growth in 2010 reached 6 percent and total GDP growth was 3 percent. Executive Directors have welcomed Algeria’s overall good economic performance in recent years amid a difficult international economic environment. Nevertheless, they noted that significant challenges persist, and have encouraged the authorities to renew their efforts to preserve macroeconomic stability, restore fiscal prudence, and diversify the economy with a stronger private sector.
ALGERIA: RELATIONS WITH THE FUND
(As of October 31, 2011)
A. Financial Relations
Membership Status
Joined: April 25, 1958; Article VIII
General Resources Account
| SDR Million | Percent Quota | |
|---|---|---|
| Quota | 1,254.70 | 100.00 |
| Fund holdings of currency | 882.62 | 70.35 |
| Reserve position in Fund | 372.08 | 29.66 |
| SDR Million | Percent Quota | |
|---|---|---|
| Quota | 1,254.70 | 100.00 |
| Fund holdings of currency | 882.62 | 70.35 |
| Reserve position in Fund | 372.08 | 29.66 |
SDR Department
| SDR | Percent | |
|---|---|---|
| Million | Allocation | |
| Net cumulative | ||
| allocation | 1,198.18 | 100.00 |
| Holdings | 1,073.34 | 89.58 |
| SDR | Percent | |
|---|---|---|
| Million | Allocation | |
| Net cumulative | ||
| allocation | 1,198.18 | 100.00 |
| Holdings | 1,073.34 | 89.58 |
Outstanding Purchases and Loans
None
Financial Arrangements
In millions of SDR, (mm/dd/yyyy)
| Amount | Amount | |||
|---|---|---|---|---|
| Approved | Drawn | |||
| Approval | Expiration | (SDR | (SDR | |
| Type | Date | Date | Million) | Million) |
| Stand-by | 5/22/95 | 5/21/98 | 1,169.28 | 1,169.28 |
| Stand-by | 5/27/94 | 5/22/95 | 457.20 | 385.20 |
| Stand-By | 6/03/91 | 3/31/92 | 300.00 | 225.00 |
| Amount | Amount | |||
|---|---|---|---|---|
| Approved | Drawn | |||
| Approval | Expiration | (SDR | (SDR | |
| Type | Date | Date | Million) | Million) |
| Stand-by | 5/22/95 | 5/21/98 | 1,169.28 | 1,169.28 |
| Stand-by | 5/27/94 | 5/22/95 | 457.20 | 385.20 |
| Stand-By | 6/03/91 | 3/31/92 | 300.00 | 225.00 |
Projected Obligations to Fund (SDR million; based on existing use of resources and present holdings of SDRs):
| Forthcoming | |||||
|---|---|---|---|---|---|
| 2011 | 2012 | 2013 | 2014 | ||
| Principal | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Charges/interest | 0.00 | 0.11 | 0.40 | 0.40 | 0.40 |
| Total | 0.00 | 0.11 | 0.40 | 0.40 | 0.40 |
| Forthcoming | |||||
|---|---|---|---|---|---|
| 2011 | 2012 | 2013 | 2014 | ||
| Principal | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Charges/interest | 0.00 | 0.11 | 0.40 | 0.40 | 0.40 |
| Total | 0.00 | 0.11 | 0.40 | 0.40 | 0.40 |
Implementation of HIPC Initiative: Not Applicable.
B. Nonfinancial Relations Exchange Rate Arrangement
1. From January 21, 1974 to October 1, 1994, the exchange rate of the dinar was determined on the basis of a fixed relationship with a basket of currencies, adjusted from time to time. On October 1, 1994, the Bank of Algeria introduced a managed float for the dinar through daily fixing sessions that included six commercial banks. This system has been replaced by an interbank foreign exchange market as of January 2, 1996. On December 15, 2011, the average of the buying and selling rates for the U.S. dollar was $1 = DA 74.6, equivalent to SDR 1 = DA 114.6. No margin limits are imposed on the buying and selling exchange rates in the interbank foreign exchange market, except for a margin of DA 0.017 between the buying and selling rates of the Bank of Algeria for the dinar against the U.S. dollar.
2. The exchange regime is classified as other managed arrangement with no preannounced path for the exchange rate. Full surrender requirements are in effect on hydrocarbon export proceeds. Limits on the making of payments for invisible transactions and current transfers, which have remained in place since Algeria accepted the obligations of Article VIII, sections 2(a), 3, and 4, in 1997, are indicative according to the authorities. Inward direct investment is generally free of restrictions; controls are maintained on other capital account payments and transfers.
Latest Article IV Consultation
3. The discussions for the 2011 Article IV consultation with Algeria were held in Algiers during October 20-November 2, 2010. The Staff Report (IMF Country Report No. 11/39) was discussed and approved by the Executive Board on January 14, 2011 and published on February 03, 2011.
Technical Assistance
An MFD mission visited Algiers in September 2005, December 2005, and in May 2006 to advise on bank restructuring.
An MFD experts visited Algiers several times from February through September 2006 to assist the Bank of Algeria to develop its bank supervision and regulation capability.
An MFD expert visited Algiers in January-February 2006 to advise on monetary and foreign exchange operations.
An MFD expert visited Algiers in February and May 2006 to advise on foreign exchange reserve management.
An STA mission visited Algiers in May 2006 to advise on monetary and financial statistics.
An MFD expert visited Algiers in May 2006 to advise on payment systems.
An STA mission visited Algiers in May 2006 to advise on consumer price statistics.
MFDs expert visited Algiers several times from February through October 2007 to assist the Bank of Algeria in banking supervision.
Two FAD missions visited Algiers in February 2007 to review tax policy and advise on customs administration.
A multisector STA mission visited Algiers in February 2007 to prepare Algeria’s participation in the GDDS.
An FAD mission visited Algiers in April 2007 to continue the program of assistance in tax administration.
An FAD mission visited Algiers in May 2008 to continue the program of assistance in tax administration.
An MCM mission visited Algiers in May 2009 to advise on strengthening banking supervision and regulation.
An MCM mission visited Algiers in June 2009 to prepare the program for harmonizing financial sector infrastructure in the Maghreb.
An MCM expert is visiting Algiers for a long-term banking supervision TA from December 2010 to December 2011.
An FAD mission visited Algiers in October 2011 to provide assistance on tax administration.
Financial Sector Assessment Program
4. Algeria participated in the FSAP in 2003. The Executive Board discussed the Financial System Stability Assessment on January 14, 2004, (see IMF Country Report No. 04/138). The FSAP was updated in 2007.
Resident Representative/Advisor
None.
ALGERIA: RELATION WITH THE WORLD BANK GROUP
JMAP Implementation, FY11
As of December 11th, 2011
| Title | Products | Provisional timing | Expected |
|---|---|---|---|
| of missions | delivery date | ||
| A. Mutual Information on Relevant Work Programs | |||
| Bank work | a. Country Partnership Strategy FY11- | Ongoing activities | FY11-FY14 |
| program in | FY14 for delivery in FY11, including | with multiple | activities |
| next 12 | Analytical and Technical Assistance | missions throughout | |
| months | activities on a reimbursable basis, no | the year | |
| lending in line with government’s | |||
| policy. | |||
| b. Sector work on: | |||
|
|||
|
|||
| IMF work program in next 12 months | 2011 Article IV Consultation | October 13-25, 2011 | January 2011 |
| Preparing analytical work on labor market issues and the level of optimal reserves in Algeria. | Ongoing | January 2011 | |
| Staff visit | April 2012 | ||
| 2012 Article IV consultation | October 2012 | January 2013 | |
| Technical assistance missions on: MCM: banking supervision on-site expert | December 2010-December 2011 | January 2012 | |
| B. Requests for Work Program Inputs | |||
| Fund request to Bank | Developments on the subsidy reform | As needed | |
| Sectoral analysis | As needed | ||
| Bank request to Fund | Assessment of macroeconomic stance and prospects | Semiannual (and on ad hoc basis if requested) | Following Article IV and staff visits |
| At least 1 operation predicted | |||
| Data sharing | Ongoing | ||
| C. Agreement on Joint Products and Missions | |||
| Joint products in next 12 months | Continuous close coordination on the reform agenda | Ongoing | |
| Title | Products | Provisional timing | Expected |
|---|---|---|---|
| of missions | delivery date | ||
| A. Mutual Information on Relevant Work Programs | |||
| Bank work | a. Country Partnership Strategy FY11- | Ongoing activities | FY11-FY14 |
| program in | FY14 for delivery in FY11, including | with multiple | activities |
| next 12 | Analytical and Technical Assistance | missions throughout | |
| months | activities on a reimbursable basis, no | the year | |
| lending in line with government’s | |||
| policy. | |||
| b. Sector work on: | |||
|
|||
|
|||
| IMF work program in next 12 months | 2011 Article IV Consultation | October 13-25, 2011 | January 2011 |
| Preparing analytical work on labor market issues and the level of optimal reserves in Algeria. | Ongoing | January 2011 | |
| Staff visit | April 2012 | ||
| 2012 Article IV consultation | October 2012 | January 2013 | |
| Technical assistance missions on: MCM: banking supervision on-site expert | December 2010-December 2011 | January 2012 | |
| B. Requests for Work Program Inputs | |||
| Fund request to Bank | Developments on the subsidy reform | As needed | |
| Sectoral analysis | As needed | ||
| Bank request to Fund | Assessment of macroeconomic stance and prospects | Semiannual (and on ad hoc basis if requested) | Following Article IV and staff visits |
| At least 1 operation predicted | |||
| Data sharing | Ongoing | ||
| C. Agreement on Joint Products and Missions | |||
| Joint products in next 12 months | Continuous close coordination on the reform agenda | Ongoing | |
ALGERIA: STATISTICAL ISSUES APPENDIX
| I. Assessment of Data Adequacy for Surveillance | ||
|---|---|---|
| General: Data provision has some shortcomings, but is broadly adequate for surveillance. Government finance statistics, national accounts, and prices have several shortcomings that hamper analysis. | ||
| National Accounts: Key shortcomings in national accounts include an outdated base year for constant price GDP estimates, long lags for publication of data, and incomplete application of the 1993 System of National Accounts. STA has recommended giving priority to compiling GDP at constant prices (including quarterly accounts) and to rebasing the GDP series. In the second semester of 2011 authorities have started to prepare quarterly accounts. | ||
| Price Statistics: Data are published with a delay of about three months. | ||
| Government finance statistics: Key shortcomings include insufficient institutional coverage (coverage is limited to Budgetary Central Government, albeit in a wide sense, including the general budget, the annexed budget, and the special treasury accounts), classification problems, long lags for production of statistics, and lack of reconciliation of financing with the monetary accounts. Key factors behind these weaknesses include the lack of financial resources allocated to the compilation of statistics, insufficient interagency coordination, and concerns about accuracy that give rise to reluctance to publish provisional data. | ||
| Monetary statistics: The authorities need to ensure the data consistency with the methodology in the Monetary and Financial Statistics Manual, 2000. Timely reporting of balance sheet data by some state-owned commercial banks remains problematic, and most commercial banks do not report all data needed to compile the monetary survey. Prudential data reported by state-owned banks are unreliable and not timely. | ||
| Balance of payments: Although balance of payments statistics are generally of good quality, they could benefit from a survey for direct investment data. | ||
| II. Data Standards and Quality | ||
| Algeria began participation in the General Data Dissemination System (GDDS) on April 21, 2009. | No data ROSC is available. | |
| I. Assessment of Data Adequacy for Surveillance | ||
|---|---|---|
| General: Data provision has some shortcomings, but is broadly adequate for surveillance. Government finance statistics, national accounts, and prices have several shortcomings that hamper analysis. | ||
| National Accounts: Key shortcomings in national accounts include an outdated base year for constant price GDP estimates, long lags for publication of data, and incomplete application of the 1993 System of National Accounts. STA has recommended giving priority to compiling GDP at constant prices (including quarterly accounts) and to rebasing the GDP series. In the second semester of 2011 authorities have started to prepare quarterly accounts. | ||
| Price Statistics: Data are published with a delay of about three months. | ||
| Government finance statistics: Key shortcomings include insufficient institutional coverage (coverage is limited to Budgetary Central Government, albeit in a wide sense, including the general budget, the annexed budget, and the special treasury accounts), classification problems, long lags for production of statistics, and lack of reconciliation of financing with the monetary accounts. Key factors behind these weaknesses include the lack of financial resources allocated to the compilation of statistics, insufficient interagency coordination, and concerns about accuracy that give rise to reluctance to publish provisional data. | ||
| Monetary statistics: The authorities need to ensure the data consistency with the methodology in the Monetary and Financial Statistics Manual, 2000. Timely reporting of balance sheet data by some state-owned commercial banks remains problematic, and most commercial banks do not report all data needed to compile the monetary survey. Prudential data reported by state-owned banks are unreliable and not timely. | ||
| Balance of payments: Although balance of payments statistics are generally of good quality, they could benefit from a survey for direct investment data. | ||
| II. Data Standards and Quality | ||
| Algeria began participation in the General Data Dissemination System (GDDS) on April 21, 2009. | No data ROSC is available. | |
Algeria: Table of Common Indicators Required for Surveillance
As of December 7, 2009
Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.
Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes, and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents. Data are partial, because of shortcomings in the compilation of FDI.
Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A); Irregular (I); and Not Available (NA), Partially available (PA).
Algeria: Table of Common Indicators Required for Surveillance
As of December 7, 2009
| Date of latest observation |
Date received |
Frequency of Data7 |
Frequency of Reporting7 |
Frequency of publication7 |
|
|---|---|---|---|---|---|
| Exchange Rates | 09/11 | 10/25/11 | D | M | W |
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | 08/11 | 10/25/11 | D | M | M |
| Reserve/Base Money | 08/11 | 10/25/11 | M | M | M |
| Broad Money | 08/11 | 10/25/11 | M | M | M |
| Central Bank Balance Sheet | 08/11 | 10/25/11 | M | M | A |
| Consolidated Balance Sheet of the Banking System | 08/11 | 10/25/11 | M | M | A |
| Interest Rates2 | 09/11 | 10/25/11 | M | M | M |
| Consumer Price Index | 09/11 | 10/25/11 | M | M | M |
| Revenue, Expenditure, Balance and Composition of Financing3—General Government4 | … | … | NA | NA | NA |
| Revenue, Expenditure, Balance and Composition of Financing3—Central Government4 | 08/11 | 10/25/11 | Q | I | A |
| Stocks of Central Government and Central Government-Guaranteed Debt5 | 09/11 | 10/25/11 | Q | I | A |
| External Current Account Balance | 06/11 | 10/25/11 | Q | Q | A |
| Exports and Imports of Goods and Services | 09/11 | 10/25/11 | Q | Q | A |
| GDP/GNP | 2010 | 10/25/11 | A | A | A |
| Gross External Debt | 09/11 | 10/25/11 | A | A | A |
| International Investment Position6 | … | … | PA | PA | PA |
Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.
Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes, and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents. Data are partial, because of shortcomings in the compilation of FDI.
Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A); Irregular (I); and Not Available (NA), Partially available (PA).
Algeria: Table of Common Indicators Required for Surveillance
As of December 7, 2009
| Date of latest observation |
Date received |
Frequency of Data7 |
Frequency of Reporting7 |
Frequency of publication7 |
|
|---|---|---|---|---|---|
| Exchange Rates | 09/11 | 10/25/11 | D | M | W |
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | 08/11 | 10/25/11 | D | M | M |
| Reserve/Base Money | 08/11 | 10/25/11 | M | M | M |
| Broad Money | 08/11 | 10/25/11 | M | M | M |
| Central Bank Balance Sheet | 08/11 | 10/25/11 | M | M | A |
| Consolidated Balance Sheet of the Banking System | 08/11 | 10/25/11 | M | M | A |
| Interest Rates2 | 09/11 | 10/25/11 | M | M | M |
| Consumer Price Index | 09/11 | 10/25/11 | M | M | M |
| Revenue, Expenditure, Balance and Composition of Financing3—General Government4 | … | … | NA | NA | NA |
| Revenue, Expenditure, Balance and Composition of Financing3—Central Government4 | 08/11 | 10/25/11 | Q | I | A |
| Stocks of Central Government and Central Government-Guaranteed Debt5 | 09/11 | 10/25/11 | Q | I | A |
| External Current Account Balance | 06/11 | 10/25/11 | Q | Q | A |
| Exports and Imports of Goods and Services | 09/11 | 10/25/11 | Q | Q | A |
| GDP/GNP | 2010 | 10/25/11 | A | A | A |
| Gross External Debt | 09/11 | 10/25/11 | A | A | A |
| International Investment Position6 | … | … | PA | PA | PA |
Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.
Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes, and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents. Data are partial, because of shortcomings in the compilation of FDI.
Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A); Irregular (I); and Not Available (NA), Partially available (PA).