Algeria: Public companies lost over $1 bln due to coronavirus

A general view taken on June 5, 2014 shows the Bay of Algiers with the old town of the Algerian capital known as the "Kasbah" in the background. (File/AFP)
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Updated 18 July 2020

Algeria: Public companies lost over $1 bln due to coronavirus

  • “Algeria is facing an unprecedented difficult economic situation,” said Prime Minister Abdelaziz Djerad
  • The government decided in early May to slash the state budget by half because of the global collapse in oil prices and coronavirus lockdowns

ALGIERS: Algeria said Saturday that the coronavirus crisis on top of falling oil prices have caused unprecedented damage to its economy, including over $1 billion in losses in the public sector alone.
“Algeria is facing an unprecedented difficult economic situation,” said Prime Minister Abdelaziz Djerad, quoted by the official APS news agency.
This was due to “the structural crisis inherited from the former government, the fall in hydrocarbon prices and finally, the health crisis” of the novel coronavirus.
The premier was speaking at a meeting at which Finance Minister Aymen Benabderahmane announced public company losses totalled more than $1 billion, affecting mainly the transport and energy sectors.
The government decided in early May to slash the state budget by half because of the global collapse in oil prices and coronavirus lockdowns.
The North African nation is heavily dependent on oil production, which generates over 90 percent of its export revenues.
The International Monetary Fund forecasts Algeria’s economy will shrink by 5.2 percent this year, and it will have among the highest budget deficits in the region.
President Abdelmadjid Tebboune has ruled out approaching the IMF for loans, saying, “accumulating debt harms national sovereignty.”
A commission tasked with assessing the impact of the pandemic on the national economy was set up Saturday, according to APS.
Algeria has reported several record daily tallies of COVID-19 cases in the past week, with 601 new infections confirmed Saturday.
The worst-affected country in North Africa, Algeria has officially reported a total of more than 22,500 cases of the COVID-19, including 1,068 deaths.


Turkey on brink of recession as economy collapses

Updated 13 August 2020

Turkey on brink of recession as economy collapses

  • Consumer debt has increased by 25 percent to more than $100 billion in the past three months

JEDDAH: President Recep Tayyip Erdogan’s popularity is plunging in lockstep with Turkey’s collapsing economy and the country is on the verge of a potentially devastating recession, financial experts have told Arab News.
The value of the Turkish lira has fallen to 7.30 against the US dollar and the central bank has spent $65 billion to prop up the currency, according to the US investment bank Goldman Sachs.
Consumer debt has increased by 25 percent to more than $100 billion in the past three months as the government moved to help families during the coronavirus pandemic, but the result has been a surge in inflation to 12 percent.
With the falling lira and increased price of imported goods, the living standards of many Turks who earn in lira but have dollar debts have fallen sharply.
The economy is expected to shrink by about 4 percent this year. The official unemployment rate remains at 12.8 percent because layoffs are banned, although many experts say the real figures are far higher.
To complete the perfect storm, tourism revenues and exports have been decimated by the pandemic, and foreign capital has fled amid fears over economic trends and the independence of the central bank.
Wolfango Piccoli, of Teneo Intelligence in London, said logic dictated an increase in interest rates but “this is unlikely to happen.”
Piccoli said central bank officials would strive to avoid an outright rate hike at their monetary policy meeting on Aug. 20. “A mix of controlled devaluation and backdoor policies, such as limiting Turkish lira’s liquidity, remains their preferred approach,” he said.
There is speculation of snap elections, and Erdogan’s view is that higher interest rates cause inflation, despite considerable economic evidence to the contrary.