1. Market Research
  2. > Energy & Environment
  3. > Energy
  4. > Oil and Gas Energy Market Trends
  5. > Algeria and Libya Business Forecast Report Q2 2014

Algeria and Libya Business Forecast Report Q2 2014

  • February 2014
  • -
  • Business Monitor International
  • -
  • 49 pages

Core Views

W e expect real GDP growth in Algeria to accelerate in 2013 and private consumption to grow strongly in the near term, while the net export position is likely to deteriorate on the back of higher imports. Moreover, planned fiscal consolidation is likely to come up short of the government’s target.
An increasing import bill will cause the current account surplus to narrow to 2.4% of GDP in 2013 and 2.1% in 2014, from 8.1% of GDP in 2012.

Major Forecast Changes

We have revised up our forecast for real GDP growth in Algeria, which we forecast to come in at 3.3% in 2013 and 4.5% in 2014 respectively, from our previous forecasts of 3.2% in 2013 and 3.6% in 2014. The economy will expand below potential over the medium term, and we forecast real GDP growth averaging 3.4% over the 2013-2017 period.

Key Risk To Outlook

As a result of the January attack on a gas facility in eastern Algeria by hard-line Islamist militants, which resulted in at least 48 deaths, we have lowered our short-term political risk rating for Algeria to 61.2 from 63.3. The security situation has remained relatively stable since the attacks.
Risks that 2013 could see the emergence of large-scale political unrest in Algeria are low, even as the country shares similar political, economic and social characteristics as other countries that experienced revolutions during the Arab Spring.

Table Of Contents

Algeria and Libya Business Forecast Report Q2 2014
BMI Risk Ratings 6
BMI Risk Ratings - Algeria 6
BMI Risk Ratings - Libya 7
Africa - Ratings League Tables 9
Executive Summary - Algeria 11
Core Views 11
Major Forecast Changes 11
Key Risk To Outlook 11
Chapter 1.1: Political Outlook - Algeria 13
SWOT Analysis 13
Domestic Politics 14
Election To Ensure Continuity 14
Regardless of whether Algeria's current President Abdelaziz Bouteflika seeks a fourth term in upcoming presidential elections, the vote
will bring continuity rather than change in the political system. Political risks will therefore increase over the medium term, while a lack of
economic reform will keep growth below potential.
table: Political Overview 14
Long-Term Political Outlook 16
Stagnation Or Upheaval: Government's Unpalatable Choice 16
Algeria's political stability faces challenges from Islamic radicalism, high unemployment and an unclear leadership future. While we
believe that economic reform is vital for future growth, the political consequences are unclear.
Chapter 1.2: Economic Outlook - Algeria 19
SWOT Analysis 19
Economic Activity 20
2014 Growth Forecast Revised Down 20
We forecast real GDP growth in Algeria of 3.2% and 3.4% in 2014 and 2015, respectively. Despite increasing government spending this
year, declining hydrocarbon exports will ensure that the economy expands below potential, a trend which we expect to continue over the
medium term.
Fiscal Policy 22
Expansionary Fiscal Policy Accentuating Political Risks 22
We see Algeria's fiscal deficit widening significantly in 2014. Persistently elevated budget shortfalls will force the government to cut
spending over the medium term, which reinforces our view that political risks will increase over the coming years. Although the 2014
budget law provides for several policies destined to facilitate investment in the country,
Monetary Policy 24
Downtrend In CPI To Reverse In 2014 24
While we believe that the headline inflation print will remain low in 2014, the ongoing downtrend in consumer price inflation (CPI) will
gradually reverse. We forecast CPI averaging 4.0% in 2013 and 5.5% in 2014 respectively.
Chapter 1.3: 10 Year Forecast - Algeria 25
The Algerian Economy To 2023 25
Reforms Crucial For Long-Term Growth 25
Achieving Algeria's long-term economic potential is far from certain, with Algiers' position towards foreign investment remaining a key
unknown variable in the business environment outlook. For the time being,
table: Long-Term Macroeconomic Forecasts 25
Chapter 1.4: Business Environment - Algeria 27
SWOT Analysis 27
Executive Summary - Libya 29
Core Views 29
Major Forecast Changes 29
Chapter 2.1: Political Outlook - Libya 31
SWOT Analysis 31
LIBYA Q2 2014 32
Domestic Politics 32
Risks Of Civil War Increasing 32
The political situation in Libya has continued to deteriorate in recent months. While not our core view, the risk of a return to full blown
civil war in 2014 is significant, and we have lowered the country's short-term political risk rating as a result.
TABLE: Political Overview 32
Long-Term Political Outlook 34
Instability Risks To Prevail; Transition To Be Bumpy 34
Libya will face multiple challenges to its stability, as it emerges from decades of one-man rule. It will take many years to establish a fully
functioning democracy, and there is no guarantee that this can be achieved. At best, the polity will remain unstable but nominally united.
At worst, we cannot rule out a division of the country or a return to conflict.
Chapter 2.2: Economic Outlook - Libya 37
SWOT Analysis 37
LIBYA Q2 2014 38
Economic Activity 38
Contraction Continues In 2014 38
We forecast Libya's economy to decline by 7.4% in 2014 and expand by 32.1% in 2015. We have revised downward our 2014 forecast
from growth of 13.0% previously, as disruptions to hydrocarbon production will take a heav y toll on exports. Risks to our 2015 forecast
are lying firmly to the downside, as they are highly dependent on a recovery in the oil sector.
Fiscal Policy 40
Long Way For Subsidy Reform 40
Despite increasing recognition by the Libyan government of the need to reform the country's subsidy system, we do not believe that
subsidy reform will be implemented anytime soon.
Chapter 2.3: 10 Year Forecast - Libya 43
The Libyan Economy To 2023 43
Long-Term Growth Outlook Highly Uncertain 43
Libya's long-term economic outlook is by no means certain, not least because of the volatile political climate. For the time being, our
forecasts are based on an assumption that reform efforts will be piecemeal at best and prone to sudden reversals. As a result, the
hydrocarbon sector will remain the key driver of growth.
table: Long-Term Macroeconomic Forecasts 43
Chapter 2.4: Business Environment - Libya 45
SWOT Analysis 45
Chapter 3: BMI Global Assumptions 47
Global Outlook 47
Fairly Benign Prognosis ... With Risks 47
Table: Global Assumptions 47
Table: Developed States, Real GDP GrowtH, % 48
Table: Emerging Markets, Real GDP Growth, % 49

View This Report »

Get Industry Insights. Simply.

  • Latest reports & slideshows with insights from top research analysts
  • 24 Million searchable statistics with tables, figures & datasets
  • More than 10,000 trusted sources
24/7 Customer Support

Talk to Veronica

+1 718 514 2762

Purchase Reports From Reputable Market Research Publishers
Industrial Plugs & Sockets Market by Protection, Type, End-User - Global Forecast to 2021

Industrial Plugs & Sockets Market by Protection, Type, End-User - Global Forecast to 2021

  • $ 6 328
  • Industry report
  • October 2016
  • by MarketsandMarkets

“The industrial plugs & sockets market is projected to grow at a CAGR of 4.82% from 2016 to 2021” The industrial plugs & sockets market is projected to reach USD 3.60 billion by 2021, growing at a ...

Marine Lubricants Market by Type, Application, and Region - Global Forecast to 2021

Marine Lubricants Market by Type, Application, and Region - Global Forecast to 2021

  • $ 6 328
  • Industry report
  • October 2016
  • by MarketsandMarkets

“Marine lubricants market projected to register a CAGR of 2.2%” The market size of marine lubricants is projected to reach USD 6.02 billion by 2021, registering a CAGR of 2.2% between 2016 and 2021.The ...

Turbocompressor Market by Type, Application, Stage, Output Pressure, and by Region - Global Trends & Forecasts to 2021

Turbocompressor Market by Type, Application, Stage, Output Pressure, and by Region - Global Trends & Forecasts to 2021

  • $ 5 650
  • Industry report
  • August 2016
  • by MarketsandMarkets

The turbocompressors market is projected to reach USD 15.81 billion by 2021, growing at a CAGR of 5.4% from 2016 to 2021. Factors such as the rapid growth of the manufacturing sector in South Asian countries ...


Reportlinker.com © Copyright 2016. All rights reserved.

ReportLinker simplifies how Analysts and Decision Makers get industry data for their business.