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Algeria vows to streamline public spending

Xinhua, August 30, 2015 Adjust font size:

The Algerian government said on Saturday that it will rationalize its public spending to counter drop of revenues due to the fall in oil prices.

"The rationalization measures aim at improving the control of state spending while preserving the social achievements and drawing as little as possible on foreign exchange reserves," said Algerian Prime Minister Abdelmalek Sellal.

The government pledged that such measures would not affect the social gains that have been achieved for the past 15 years.

Oil prices of Brent (reference for Algerian oil), despite a slight rise on Saturday, had hit 47.16 U.S. dollars. The black gold has also lost 53 percent of its value.

Hydrocarbons represent 96 percent of the revenue of Algeria, while the Brent price went from 110 dollars one barrel in June 2014 to under 50 dollars one barrel currently.

Algerian analysts already warned that if this situation continues, the country would have to rely on its foreign exchange reserves.

But according to the International Monetary Fund (IMF) data released in April, Algeria's foreign exchange reserves had fallen by 11.6 billion dollars since January 2015.

The assets of the foreign reserves, estimated at 179 billion dollars at the end of 2014, would last only for 15 months in case the current rate of public expenditure maintains, according to IMF. Endit