ALGIERS: International Monetary Fund (IMF) experts urged Algeria on Monday to “recalibrate” its oil and gas-dependent economy and implement structural reforms.
“There is urgent need for a recalibration of economic policies to address macroeconomic imbalances while protecting and enhancing support to the most vulnerable,” the team said in a statement after a three-week virtual mission to the North African country.
They said the coronavirus pandemic and the shock it delivered to oil production and prices “seriously impacted the economy last year, leading to a sharp contraction in real GDP of 4.9 percent in 2020.”
And while crude prices have since bounced back to above pre-pandemic levels, they warned that the health crisis had “further exposed the vulnerabilities of the Algerian economy,” with widening fiscal deficits and dwindling international reserves.
The African continent’s fourth-biggest economy and its top gas exporter, Algeria is sensitive to swings in hydrocarbons prices which make up more than 90 percent of its foreign receipts.
The IMF experts said the country was experiencing “a gradual recovery... with economic growth expected to exceed 3 percent this year, supported by the increase in hydrocarbon prices and production.”
But they warned that inflation had accelerated to 4.1 percent in June 2021 on higher international food prices and a drought that has battered farmers across the Maghreb region.
“In the medium term, growth will likely remain subdued due to constraints on hydrocarbons production” as well as cuts to investment and a lack of credit facilities for the private sector, the statement said.
The experts warned against high fiscal deficits which could force the country to take “unprecedented” steps and deplete its foreign exchange reserves.
President Abdelmadjid Tebboune in April ruled out approaching the IMF for a bailout, contending that “accumulating debt harms national sovereignty” when it is owed to foreign institutions.
The IMF experts urged the country to “diversify... budget financing sources, including through external borrowing.”
IMF urges Algeria to ‘recalibrate’ economy
https://arab.news/8fn83
IMF urges Algeria to ‘recalibrate’ economy
- "There is urgent need for a recalibration of economic policies to address macroeconomic imbalances while protecting and enhancing support to the most vulnerable," IMF team said
- IMF experts said the country was experiencing a gradual recovery
Saudi ports brace for cargo surge as shipping lines reroute
RIYADH: Preliminary estimates suggest that several global shipping lines could reroute part of their operations to Saudi Arabia’s Red Sea ports, potentially adding 250,000 containers and 70,000 vehicles per month, according to Rayan Qutub, head of the Logistics Council at the Jeddah Chamber of Commerce, in an interview with Al-Eqtisadiah.
“Any disruption in the Strait of Hormuz not only affects maritime traffic in the Arabian Gulf but could also reshape global trade routes,” Qutub said, highlighting the strait’s status as one of the world’s most critical maritime chokepoints for energy and goods transport.
With rising regional tensions, international shipping companies are reassessing their routes, adjusting shipping lines, or exploring alternative sea lanes. This signals that the current challenges extend beyond the Arabian Gulf, impacting the global supply chain as a whole.
Limited impact on US, European shipments
The effects of these developments will not be uniform across trade routes. Qutub noted that goods from China and India, which rely heavily on routes through the Arabian Gulf, are most vulnerable to disruption. In contrast, shipments from Europe and the US typically traverse western maritime routes via the Suez Canal and the Red Sea, making them less susceptible to regional disturbances.
Saudi Arabia’s strategic location, he emphasized, strengthens the resilience of regional trade. The Kingdom operates an integrated network of Red Sea ports — including Jeddah, Rabigh, Yanbu, and Neom — that have benefited from substantial infrastructure upgrades and technological enhancements in recent years, boosting their capacity to absorb increased cargo volumes.
Red Sea bookings
Several major carriers, including MSC, CMA CGM, and Maersk, have already opened bookings to Saudi Red Sea ports, signaling a shift in operational focus to these strategically positioned hubs.
However, Qutub warned that rerouted shipments could increase sailing times. Cargo from Asia, which normally takes 30-45 days, might now require longer voyages via the Cape of Good Hope and the Mediterranean, potentially extending transit to 60-75 days in some cases.
These changes are also reflected in rising shipping costs, driven by longer routes, higher fuel consumption, and increased insurance premiums — a typical response when global trade patterns shift due to geopolitical pressures.
Qutub emphasized that Saudi Arabia’s transport and logistics sector is managing these developments through coordinated government oversight. The Ministry of Transport and Logistics, the Logistics National Committee, and the Logistics Partnership Council recently convened to evaluate the impact on trade and supply chains. Regular weekly meetings have been established to monitor developments and implement solutions to safeguard the stability of supplies and continuity of trade.
He noted that the Kingdom’s logistical readiness is the result of long-term strategic investments, encompassing ports, airports, road networks, rail systems, and logistics zones. Today, Saudi logistics integrates maritime, land, rail, and air transport, enabling a resilient response to global disruptions.
Qutub also highlighted the need for the private sector to continuously review logistics and crisis management strategies, develop alternative plans, and manage strategic stockpiles. Such measures are essential to mitigate temporary fluctuations in global trade and ensure smooth supply chain operations.
