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The Economy Of Algeria, Africa Essay

1331 words - 5 pages

Second largest country in Africa, tenth largest country in the world, diverse culture extending from the Mediterranean coast to the dunes of the Sahara Desert...Algeria. Even with its massive size the current status of Algeria’s economy is quivering in the lofty winds of the Tell Atlas Mountains. The economy tends to remain dominated by the state, which is accordingly a legacy of the country’s socialist post-independence development model. Hydrocarbons are the backbone for Algeria, accounting for 60% of budget revenues, 30% GDP, and 95% of export earnings. Reviewing the last five years we see the government halting privatization of state-owned industries, and increasing the restrictions of imports and foreign involvement. Algeria’s economy, however, continues to grow in 2012 it grew 2.5%, up vaguely from 2011 at 2.4%. Then excluding hydrocarbons the growth has been 5.8%, 0.1% from 2011. Inflation is increasing, currently at 3.9% which varies yearly; 8.9% in 2012, 4.5% in 2011. From 2004 to 2008 the real GDP stay fairly consist from 5-7%, however in 2009 it dropped immensely, and since then every other year the numbers fluctuate. The highest was in 2012 at almost 10%, and the lowest was 2011 at 0%. Looking at the past decade it is perplexing to understand the pattern the GDP follows. The gross national savings in 2013 was 45.5% of the GDP, fluctuating like real GDP; 44.4% (2012), 47.7% (2011). The labor force was at 11.15 million in 2013 which is ranked 48th in the world, however with the high unemployment rate (10.3%-2013) it brings the country to 109th in the world. With the current account balances at $6.7 billion, which is half the amount from 2012 ($12.3 billion), which coincides with the exports amounts of $68.25 billion in 2013 and $71.74 billion in 2012. Similarly the imports are costing more from $51.57 billion in 2012 to 55.02 billion in 2013. Exports and imports have to increase because inflation is occurring worldwide.
Continuing with GDP, the composition consists of 33.7% for household, 20.6% for government, 32.9% for investment in fixed capital, 8.2% for investment in inventories, 33.3% for exports of goods and services, and -28.7% for imports of goods and services. In the past, Algeria relied tremendously on agriculture and farming, how today the sectors are divided differently; 9.4% for agriculture, 62.6% for industry, and 28% for services. The main agriculture products are wheat, barley, oats, grapes, olives, citrus, fruits, sheep, and cattle. This sectors does not meet the needs of food for the population, so 45% of the food is imported. Algeria is also a producer of cork and sandalwood products, along with the fishing industry, which is flourishing. The fishing (sardines, bonito, smelt, and sprats) are usually completed by small family-owned boats, not commercial fishing trawlers. The main industries with a 2.5% growth are petroleum, natural gas, light industries, mining, electrical, petrochemical, and food processing....

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