Since the beginning of the year, the 2018 Budget act is ongoing in Algeria and it is not so joyful for citizens who don’t earn a good living as it allready has a negative impact on their purchasing power.
Following the global drop in oil prices in the last years, the economy of Algeria was seriously hit by the financial crisis. As part of its strategy, the government is relying on the oils exportations in the budget funding, particularity since President Abdelaziz Bouteflika came to power in 1999.
In 2018, things will actually change. The new draft is expected to bring an alternative to the “oils revenues dependency” which totally encloses the country in a bad economic outlook. The solution may come from a new conceptualization of the way of making an expense and operational budget in Algeria.
The administration’s priority is to stop the sovereign fund’s bleeding and restoring the trade balance. Thus, its “witch’s potion” in 2018 could be a progressive increasing of tax revenues beside the importation restrictions over the ban list of more than 900 products.
These new austerity measures will be reflected in the decline of the expenditure budget to 62 billion euros in 2018, 59 millions euros in 2019 and 56 million euros in 2020. Furthermore, the act provides the raising of the taxes’ rates of products such as vehicle fuels (tax on petroleum products TPP), tobacco products (additional tax) and energy-intensive white goods.
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