With crude oil prices having more than halved since June, Algeria must plot a precarious path of curbing high public spending without eating into a generous welfare budget that has helped stave off widespread social unrest, Reuters informs.
The price slide is testing an economic system that relies on energy revenues to pay for social subsidies, from public housing to cheap loans, which helped Algeria avoid the kind of „Arab Spring” uprisings that erupted in its North African neighbours.
Although, recent protests have taken place against the backdrop of Algeria’s government introducing 10 „save-money measures”, including a public-sector hiring freeze and postponement in funding mega-projects, such as railways and tramways.
„We are not talking about austerity, we are talking about rationalising spending,” Prime Minister Abdelmalek Sellal said in a national broadcast. „We are now in crisis, but Algeria has anticipated this.”