Macroeconomic Forecast Algeria

Although strong revenue growth on the back of higher oil prices will bode well for the government's expansionary spending drive, unrest unfolding in the Middle East and North Africa (MENA) will prompt Algiers to ramp up spending, offsetting the acceleration of revenues, with the government more worried about mitigating unrest than fiscal consolidation. We forecast the budget deficit to come in at 6.7% of GDP in 2011, slightly wider than our 2010 estimate of 6.5%.

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