The GDP of late has been fluctuating due to the improper government polices. But they are making an effort to clear all the foreign debts, which Algeria had incurred during the eighties, and establish them as a stable economic system. To clear off the debts Algeria had concluded an agreement with the IMF in April 1994 and also signed for a fund facility that was over on April 30. Russia released Algeria of the Soviet era debt, which amounted to $4.74billion. Due to the growth of the natural gas and oil sector Algeria was able to clear off a huge percent of foreign debt and it fell to $5 billion. The government was also able to reduce the inflation rate to 1.1%. Government's endeavors to make Algeria a self sufficient nation are conspicuous through the economic reforms. These efforts have reduced the debts but unfortunately could not reduce the problem of unemployment.
Sectorial Growth
Algerian economy is based on three sectors. The agricultural sector which was formerly the major sector that earned high revenues. The industrial sector that has undergone development and is still growing. The services sector that lacks the infrastructure, which is impeding its growth.- Agricultural Sector employs 9.4% of the population. Agriculture used to be one of the major resources for the government to earn revenue. The production consisted of wheat, barley, and oats. The soil of Algeria is considered to be fertile. During the French rule the artesian wells helped them to increase the fertility of the soil. Algeria used to grow cotton, which declined during the American Civil War. But it was revived during the first half of 20th century. The farmers cultivate olive and tobacco with a considerable amount of success. The oat market is the largest in Africa.
- The industrial sector earns the lion’s share of revenue for the government. 58.1% of the population is involved in this sector. Petroleum, oil, natural gas, light, electrical, mining, petrochemical, food processing are the major industries in Algeria. The hydrocarbon sector forms the backbone of Algerian economy. It accounts for 60% of the budget revenue, 30% of GDP and over 95% of export earnings. Algeria ranks fourth among oil and natural gas exporting countries. The macro economy indicators of the country improved after the sustained high price of oil. This in turn has helped to enhance the GDP growth of the country.
- The services sector is not among the developed sectors of Algeria. This sector contributes the least to its economy.
