Macroeconomic Forecast Algeria

BMI View: We remain bullish on the prospects for the Algerian economy in 2006, with growth expected to remain above 5%. Public spending and increased structural reforms will stimulate growth backed by high hydrocarbon prices. The budget surplus will decrease slightly in 2006 to 9.6% of GDP, down from 10.4% last year due to the government's increased spending commitments. There is an upside risk to our inflation forecast of 2% this year given government promises of new salary increases.

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