Neil Pierson is editor of Scotsman Guide Commercial Edition.
Reach him at (800) 297-6061 or firstname.lastname@example.org.
Algeria, an African nation that gained its independence in 1962 following a
protracted battle with France, is now the 33rd-most populous country in the world,
with nearly 41 million citizens as of July 2017. The vast majority of Algerians are
Berbers, with Arabic and Berber serving as the country’s two official languages,
according to the CIA World Factbook.
The nation’s economy was historically built on socialist principles and is still largely
under governmental control as lawmakers have halted recent efforts to privatize some
state-run industries. The nation is highly dependent on hydrocarbons, which accounted
for about 30 percent of its $633 billion gross domestic product (GDP) as of 2017.
Algeria has the world’s 10th-largest natural gas reserves and the 16th-largest oil
reserves. Declining oil prices of late, however, have hampered the government’s
ability to subsidize public housing and may be contributing to modest tax increases
for items like alcohol, cigarettes and gasoline.
Algeria’s total exports — largely consisting of natural gas and petroleum products
— grew to $33 billion in 2017. Exports to Italy, Spain, France and the United States
account for about half of that figure.
The nation’s annual GDP growth rate dropped from 3. 8 percent in 2015 to 1.7 percent in 2017, the World Bank reported. Its unemployment rate rose from 10. 5 percent
in 2016 to 11. 7 percent in 2017, and 23 percent of the population, or about 9 million
people, live below the poverty line, according to the CIA World Factbook.
In a report released this past June, the International Monetary Fund (IMF)
recommended that Algeria continue gradual fiscal-consolidation efforts and that its
central bank should “stand ready to tighten the monetary-policy stance if inflationary
pressures emerge.” The IMF estimated that annual inflation would rise to 7. 6 percent
in 2019, up from 6. 5 percent as of this past October.
Algeria’s military, intelligence services and other groups have long engaged in a tug
of war for political power. Abdelaziz Bouteflika, who has served as president since
1999, will run for a fifth term in 2019. He fired several key military officials last year
in an apparent attempt to limit the military’s role in government, Reuters reported.
According to real estate services company JLL, several multinational companies have
shown increased interest in Algeria of late due to its proximity to other African and
European markets. The nation is poised to diversify its economic base by investing in
employment sectors such as construction, telecommunications and tourism, and the
clearest opportunities for real estate investors appear to be in residential, hotel and
office properties, JLL reported.
Cultural tourism also is on the rise in Africa, JLL reported, so countries like Algeria could
take advantage of a “boom in demand for lifestyle hotels,” which are located in trendy
neighborhoods or historic towns and deliver a fresh appeal to millennial consumers. n
By Neil Pierson
Algeria’s annual inflation rate
as of October 2018
Algeria’s unemployment rate
as of October 2018
Algeria’s GDP growth rate in 2017