APS : Saturday, 02 June 2018
WASHINGTON- The International Monetary Fund (IMF) welcomed Friday the economic adjustment efforts carried out by the government to face the drop in oil prices,
emphasizing its willingness to advance the reforms to boost a diversified economy, less dependent on hydrocarbon sector.
IMF Executive Board welcomed the authorities’ efforts to manage the economic adjustment process, while the country is facing, since 2014, challenges related to lower oil prices, said IMF in a statement issued in Washington, following the approval by the Fund Executive Board of the assessment report on the Algerian economy, established under the article IV.
It also “welcomed the authorities’ intention to implement the reforms aimed at encouraging private sector development by improving the business environment, enhancing access to finance as well as strengthening governance, transparency and competition.”
Adding “supporting the efforts to raise more non-hydrocarbon revenue, improve public sending efficiency and management and expand the subsidy reform” while protecting the poor.
The Executive Board “noted that the authorities’ policy mix includes increased fiscal spending in 2018 followed by a resumption of the fiscal consolidation over the medium term, monetary financing of fiscal deficits, temporary restriction on imports as well as structural reforms aimed at diversifying the economy.”
It suggested in case of maintaining monetary financing to implement safeguard measures.
In this regard, IMF’s directors welcomed the Central Bank’s commitment to sterilizing liquidity resulting from monetary financing as needed.
IMF underlined that it is possible to rely on a broader range of financing options to finance well-chosen investment projects.
It noted that the banking sector continues to perform relatively well, pointing out that, given the macro-economic risks and the financial linkages in the public sector, the macro-prudential framework should be strengthened, including through more frequent stress tests and development of a crisis management framework.
