Algeria’s informal economy will test Tebboune’s power
Tuesday, April 19, 2022
Significance
The reforms were intended to address the deterioration in state finances caused by the slump in oil prices since 2014. However, the fiscal outlook has altered dramatically in recent months due to rising hydrocarbon revenues. If implemented, the reforms would represent a significant incursion into Algeria’s large informal economy.
Impacts
- Efforts to diversify the economy will be set back, making the country vulnerable to longer-term falls in oil prices.
- Further planned reforms, for example, ending the ‘51:49 law’ capping foreign ownership of companies, are now unlikely.
- Social unrest remains a significant risk, but will not threaten Tebboune’s position.