Economy

Algeria is rich in natural resources, including petroleum, natural gas, iron ore, phosphates, uranium, lead, and zinc. The hydrocarbons sector is the backbone of the country's economy, accounting for approximately 57 percent of government revenues, 29 percent of the GDP, and almost all export earnings. Algeria's natural gas reserves are the fifth largest in the world. Oil reserves ranks fourteenth.

In 1996, 16.8 percent of Algeria's exports was to the United States, 13 percent to France, 20.2 percent to Italy, 7.5 percent to Germany, 8.7 percent to Spain, and 5.7 percent to the Netherlands. It's imports came mainly from: France (31.9 percent of the total), Italy (9.5), Spain (9.1), the United States (8.2), Germany (5.3), and Canada (3.7). In 1997, imports of goods from France rose by 6 percent, while exports rose by 43.6 percent. Hydrocarbons is the most significant portion of exports to France (12.2 billion in French franks, compared to the total export of 12.64 billion French francs): 96.5 percent of total exports.

Agriculture accounts for about 10.7 percent of GDP (1997). Growth in 1996 was 3.8 percent, while in 1997, it was only about 2.5 percent.

Inflation level, according to official statistics, was 5.7 percent in 1997, 5 percent (on an annualized basis) in the first quarter of 1998, and slightly above 5 percent in the second quarter. This compares favorably with the 18 percent inflation rate of 1996 and the 29.8 percent of 1995.

Unemployment, however, is high, officially at 28.3 percent (1997), with a forecast of 34 percent unemployment by the year 2000. The proportion of Algerians aged 16-25 seeking work, however, decreased sharply (46,698 in 1996 down to 28,142 in 1997). This may be reflective of the efforts by the government to create jobs for the youth. Nevertheless, the number of Algerians claiming unemployment insurance rose by 21.5 percent in 1997. According to official statistics, 1,138 companies which were surveyed in March of this year had laid off workers. This includes 739 local, smaller state-owned businesses, the sector most affected by reforms; 306 larger public economic businesses; and 93 in the private sector. (Note that unemployment rates are based on the number of people seeking work and receiving unemployment benefits through the official system. Under-employment and other unemployed Algerians are not counted.)