Finance Minister Abderrahmane Raouya unveiled at the National People's Congress (NPC) the Bill on Financing (PLF) 2019 at a plenary session chaired by Mouad Bouchareb in the presence of government members.
The bill provides for an increase of 2.9% for the financial year 2019, compared with an increase of 3.2%, excluding hydrocarbons. It was developed on the basis of a reference price of US $ 50 / barrel of Algerian oil "Sahara Blend" and based on the market price at 60 Usd.
With regard to the Algerian Dinar exchange rate, it should be about 118 dinars / dollar, the average annual price for the period 2019-2021, with inflation of 4.5% in 2019 and 3.9% in 2020 and 3, 5 % in 2021.
In anticipation of a 1% decline in oil exports to $ 33.2 billion in 2019, an increase in non-oil volumes is expected due to construction and public works at 4.7%, industry (5%), agriculture ( 3.7%) and market and non-market services (1.8%).
In the medium term, economic growth will grow to 3.4% in 2020 and 3.2% in 2021, with an average non-hydrocarbon growth of 3.1% in 2020-21, according to PLF forecasts. as well as an increase in oil exports of 4.2% in 2020, with revenues estimated at $ 34.5 billion and 2% in 2021, with revenues of $ 35.2 billion.
Foreign currency reserves to less than $ 62 billion in 2019
Reflecting measures taken by the government to regulate imports, the bill says, as Raouya says, a decline in goods imports to $ 44 billion in 2019, $ 42.9 billion in 2020 and $ 41.8 billion in 2021.
As a result, the trade deficit will gradually decrease from $ 10.4 billion in 2019 to $ 8.2 billion in 2020 and $ 6.4 billion in 2021.
For the period 2019-2021, PLF forecasts 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 to $ 14 billion in 2021.
This decline will result in a decline in foreign exchange reserves to $ 62 billion in 2019, then to $ 47.8 billion in 2020, then to $ 33.8 billion in 2021.
The PLD 2019 forecasts a 10.9% drop in capital spending and a 8.1% increase in operating expenses, resulting in a cash deficit of -10.4% against Gross Domestic Product (GDP) (versus -11% in 2018).
Of the total estimated expenditure of 8,557.2 billion YY, the draft law foresees an increase in operating expenses of 4,954.5 billion YE in 2019 (+ 8.1%) compared to estimated capital expenditure at YY 3,602.7 billion (-10, 9%).
Budget revenue projected for 2019 amounts to DEM 6 507.9 billion, including DEM 2,714.5 billion DA included in the budget.
The oil tax is expected to reach $ 3.201,4 billion in 2019.
However, the forecasted deficit of the treasures in relation to gross domestic product (GDP) will fall to -5.7% in 2020 and -5% in 2021, according to the forecasts of the Ministry of Finance.
Financing the cash deficit between 2019 and 2021 "will be a kind of pressure, despite the use of unconventional funding and withdrawal from the Revenue Regulation Fund (FRF) during this period."
However, the need for unconventional funding will "decrease", reaching -1,874.4 billion yuan in 2019, -746.5 billion yuan in 2020 and -796.5 billion yuan in 2021, the minister said.
The legislative provisions in the bill aim to improve state revenues, coordinate and simplify procedures, combat corruption and tax evasion, in addition to encouraging and promoting investment productivity and improving bank interest rates for the benefit of citizens.
The text 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 marked by tensions over the domestic and external balances of the country due to the drop in oil prices.
To this end, the bill aims at exercising control over public spending to reduce the repercussions of these tensions on the public treasury.
At the end of the minister's presentation, the rapporteur of the Assembly's Finance and Budget Committee read the committee's preliminary draft law before the debate began by Members.
The Minister will answer the deputies' concerns on Monday on the bill that will be voted on Thursday by the lower house of parliament.