Abstract
The economic condition of Algeria in 2012 is stable. Rising inflation, continued heavy reliance on the hydrocarbon sector and public spending, and vulnerability to a prolonged decline in the oil price, as well as high unemployment pose significant challenges. Explicitly considering an annual cap on drawdowns from the oil fund would strengthen the oil price fiscal rule. The importance of public financial management, shortcomings in the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) framework, restrictive FDI, and full-fledged budget framework has been stressed. Measures taken for increasing employment have been outlined.
Annex I. Algeria: Relations with the Fund
(As of November 16, 2012)
A. Financial Relations
I. Membership Status: Joined: September 26, 1963; Article VIII.
II. General Resources Account
| SDR Million | Percent Quota | |
| Quota | 1,254.70 | 100.00 |
| Fund holdings of currency | 840.92 | 67.02 |
| Reserve position in Fund | 413.78 | 32.98 |
| SDR Million | Percent Quota | |
| Quota | 1,254.70 | 100.00 |
| Fund holdings of currency | 840.92 | 67.02 |
| Reserve position in Fund | 413.78 | 32.98 |
III. SDR Department
| SDR Million | Percent Allocation | |
| Net cumulative allocation | 1,198.18 | 100.00 |
| Holdings | 1,074.28 | 89.66 |
| SDR Million | Percent Allocation | |
| Net cumulative allocation | 1,198.18 | 100.00 |
| Holdings | 1,074.28 | 89.66 |
IV. Outstanding Purchases and Loans
None
V. Financial Arrangements (In millions of SDR)
| Type | Approval Date | Expiration Date | Amount Approved (SDR Million) | Amount Drawn (SDR 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 |
| Type | Approval Date | Expiration Date | Amount Approved (SDR Million) | Amount Drawn (SDR 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 |
VI. Projected Obligations to Fund
(SDR million; based on existing use of resources and present holdings of SDRs):
| Forthcoming | |||||
|---|---|---|---|---|---|
| 2012 | 2013 | 2014 | 2015 | 2016 | |
| Principal | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Charges/interest | 0.02 | 0.13 | 0.13 | 0.13 | 0.13 |
| Total | 0.02 | 0.13 | 0.13 | 0.13 | 0.13 |
| Forthcoming | |||||
|---|---|---|---|---|---|
| 2012 | 2013 | 2014 | 2015 | 2016 | |
| Principal | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Charges/interest | 0.02 | 0.13 | 0.13 | 0.13 | 0.13 |
| Total | 0.02 | 0.13 | 0.13 | 0.13 | 0.13 |
Implementation of HIPC Initiative: Not Applicable.
B. Nonfinancial Relations
VII. 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 12, 2012, the average of the buying and selling rates for the U.S. dollar was US$ 1 = DZD 78.21, equivalent to SDR 1 = DZD 120.15. No margin limits are imposed on the buying and selling exchange rates in the interbank foreign exchange market, except for a margin of DA 0.015 between the buying and selling rates of the Bank of Algeria for the dinar against the U.S. dollar.
2. The de facto 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 but a 49 percent foreign ownership limit has been introduced in December 2009; controls are maintained on other capital account payments and transfers.
VIII. Latest Article IV Consultation
The discussions for the 2012 Article IV consultation with Algeria were held in Algiers during October 29–November 11, 2011. The Staff Report (IMF Country Report 12/20) was discussed and approved by the Executive Board on January 14, 2012 and published on January 31, 2012.
IX. Technical Assistance
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 advised on customs administration.
A multi-sector 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.
An STA mission visited Algiers in April 2012 to provide assistance on monetary and financial statistics and financial stability indicators.
An MCM mission visited Algiers in September 2012 to provide assistance on banking supervision, macro-prudential policy and monetary policy.
An FAD mission visited Algiers in September 2012 to provide assistance on public financial management.
X. Financial Sector Assessment Program
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.
XI. Resident Representative/Advisor
None.
Annex II. Algeria: Relations with the World Bank Group
JMAP Implementation, FY12
As of December 20, 2012
JMAP Implementation, FY12
As of December 20, 2012
| Title | Products | Provisional timing of missions | Expected delivery date | |
|---|---|---|---|---|
| A. Mutual Information on Relevant Work Programs | ||||
| Bank work program in next 12 months | a. | Country Partnership Strategy FY11-FY14, including Analytical and Technical Assistance activities on a reimbursable basis, no lending in line with government’s policy. |
Ongoing activities with multiple missions throughout the year | FY11-FY14 activities |
| Progress Report for the FY11-14 CPS | FY13/14 | |||
| b. | Sector work on: | |||
|
||||
| c. | Technical assistance on | |||
|
||||
| IMF work program in next 12 months | 2012 Article IV Consultation | October 29-November 11, 2012 | January 2013 | |
| Preparing analytical work on growth and inflation in Algeria | Ongoing | January 2013 | ||
| Staff visit | April 2013 | January 2014 | ||
| 2012 Article IV consultation | October 2013 | January 2013 | ||
| Technical assistance missions on: | January 2013 | March 2013 | ||
| MCM: financial supervision | March 2013 | |||
| FAD: subsidy reform | ||||
| 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 | ||
JMAP Implementation, FY12
As of December 20, 2012
| Title | Products | Provisional timing of missions | Expected delivery date | |
|---|---|---|---|---|
| A. Mutual Information on Relevant Work Programs | ||||
| Bank work program in next 12 months | a. | Country Partnership Strategy FY11-FY14, including Analytical and Technical Assistance activities on a reimbursable basis, no lending in line with government’s policy. |
Ongoing activities with multiple missions throughout the year | FY11-FY14 activities |
| Progress Report for the FY11-14 CPS | FY13/14 | |||
| b. | Sector work on: | |||
|
||||
| c. | Technical assistance on | |||
|
||||
| IMF work program in next 12 months | 2012 Article IV Consultation | October 29-November 11, 2012 | January 2013 | |
| Preparing analytical work on growth and inflation in Algeria | Ongoing | January 2013 | ||
| Staff visit | April 2013 | January 2014 | ||
| 2012 Article IV consultation | October 2013 | January 2013 | ||
| Technical assistance missions on: | January 2013 | March 2013 | ||
| MCM: financial supervision | March 2013 | |||
| FAD: subsidy reform | ||||
| 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 | ||
Annex III. Algeria: Statistical Issues
| I. Assessment of Data Adequacy for Surveillance | |
| General: Data provision has some shortcomings, but is broadly adequate for surveillance. | |
| National Accounts: Following STA recommendations, the NSO is now compiling annual national accounts (ANA) at prior year prices. The ANA broadly follow the 1993 SNA recommendations, but nonprofit institutions serving households are not taken into account. Work is ongoing to compile QNA. | |
| Price Statistics: Data are published with a delay of less than one month. | |
| 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 concern about accuracy that give rise to reluctance to publish provisional data. | |
| Monetary statistics: Monetary statistics compiled by the authorities are largely in line with the methodology in the Monetary and Financial Statistics Manual, 2000 and its companion Compilation Guide, 2008. Timeliness of reporting by state-owned commercial banks has significantly improved over the last two years; consequently, data on depository corporations—as well as finance companies—are usually available within a period of two to three months. Reporting formats (balance sheet and appendices) applied to commercial banks and finance companies were updated in 2009 and the updated version was enforced in 2010. All respondents now provide all requested data, thus making the monetary statistics more meaningful than before. Data on insurance corporations are not yet collected, but the Banque d’Algérie, with the continuing support of the IMF Statistics Department, launched in 2009 a project to this end. | |
| Balance of payments: Balance of payments statistics are generally of good quality. International investment position data are not available | |
| 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. | |
| National Accounts: Following STA recommendations, the NSO is now compiling annual national accounts (ANA) at prior year prices. The ANA broadly follow the 1993 SNA recommendations, but nonprofit institutions serving households are not taken into account. Work is ongoing to compile QNA. | |
| Price Statistics: Data are published with a delay of less than one month. | |
| 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 concern about accuracy that give rise to reluctance to publish provisional data. | |
| Monetary statistics: Monetary statistics compiled by the authorities are largely in line with the methodology in the Monetary and Financial Statistics Manual, 2000 and its companion Compilation Guide, 2008. Timeliness of reporting by state-owned commercial banks has significantly improved over the last two years; consequently, data on depository corporations—as well as finance companies—are usually available within a period of two to three months. Reporting formats (balance sheet and appendices) applied to commercial banks and finance companies were updated in 2009 and the updated version was enforced in 2010. All respondents now provide all requested data, thus making the monetary statistics more meaningful than before. Data on insurance corporations are not yet collected, but the Banque d’Algérie, with the continuing support of the IMF Statistics Department, launched in 2009 a project to this end. | |
| Balance of payments: Balance of payments statistics are generally of good quality. International investment position data are not available | |
| 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 20, 2012
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 20, 2012
| Date of latest observation | Date received | Frequency of Data7 | Frequency of Reporting7 | Frequency of publication7 | |
|---|---|---|---|---|---|
| Exchange Rates | 09/12 | 10/29/12 | D | M | W |
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | 08/12 | 10/29/12 | D | M | M |
| Reserve/Base Money | 08/12 | 10/29/12 | M | M | M |
| Broad Money | 08/12 | 10/29/12 | M | M | M |
| Central Bank Balance Sheet | 08/12 | 10/29/12 | M | M | A |
| Consolidated Balance Sheet of the Banking System | 08/12 | 10/29/12 | M | M | A |
| Interest Rates2 | 09/12 | 10/29/12 | M | M | M |
| Consumer Price Index | 09/12 | 10/29/12 | M | M | M |
| Revenue, Expenditure, Balance and Composition of Financing3—Central Government4 | 08/12 | 10/29/12 | M | I | A |
| Stocks of Central Government and Central Government-Guaranteed Debt5 | 09/11 | 10/29/12 | Q | I | A |
| External Current Account Balance | 06/12 | 10/29/12 | Q | Q | A |
| Exports and Imports of Goods and Services | 09/12 | 10/29/12 | Q | Q | A |
| GDP/GNP | 2011 | 10/29/12 | A | A | A |
| Gross External Debt | 09/12 | 10/29/12 | 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 20, 2012
| Date of latest observation | Date received | Frequency of Data7 | Frequency of Reporting7 | Frequency of publication7 | |
|---|---|---|---|---|---|
| Exchange Rates | 09/12 | 10/29/12 | D | M | W |
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | 08/12 | 10/29/12 | D | M | M |
| Reserve/Base Money | 08/12 | 10/29/12 | M | M | M |
| Broad Money | 08/12 | 10/29/12 | M | M | M |
| Central Bank Balance Sheet | 08/12 | 10/29/12 | M | M | A |
| Consolidated Balance Sheet of the Banking System | 08/12 | 10/29/12 | M | M | A |
| Interest Rates2 | 09/12 | 10/29/12 | M | M | M |
| Consumer Price Index | 09/12 | 10/29/12 | M | M | M |
| Revenue, Expenditure, Balance and Composition of Financing3—Central Government4 | 08/12 | 10/29/12 | M | I | A |
| Stocks of Central Government and Central Government-Guaranteed Debt5 | 09/11 | 10/29/12 | Q | I | A |
| External Current Account Balance | 06/12 | 10/29/12 | Q | Q | A |
| Exports and Imports of Goods and Services | 09/12 | 10/29/12 | Q | Q | A |
| GDP/GNP | 2011 | 10/29/12 | A | A | A |
| Gross External Debt | 09/12 | 10/29/12 | 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).