Dubai- Masaader News
Algeria’s economy contracted 3.9% in the first quarter this year after a 1.3% growth in the same period in 2019, weakened by the coronavirus lockdown and a bad performance by the vital oil and gas sector, the government said on Saturday, according to Reuters.
The OPEC member and gas-exporting country’s energy sector contracted 13.4% in the first three months of 2020, nearly double the 7.1% contraction a year earlier, according to the National Statistics Bureau.
Oil and gas account for 60% of the state budget and 93% of total export revenue as the non-energy sector is still underdeveloped despite government attempts to carry out reforms.
Energy earnings dropped 26% in the first three months due to lower output and exports as well as a fall in global crude oil prices caused by the coronavirus outbreak which affected global demand.
That added to financial pressure, pushing the government to cut public spending and delay planned investment projects for this year in main sectors including energy.
The authorities are due to announce next month a new “social and economic revival plan” aimed at reducing reliance on energy and develop the non-oil sector.
They imposed a lockdown earlier this year to limit the spread of the novel coronavirus, weakening growth in almost all sectors.
Growth in the services sector stood at -2.8% in the first quarter after growing 5% in the first three months of 2019.
Transport and communications contracted 4.8% against a 5.3% growth last year, while the industry sector reported a -0.5% growth compared with +4.9% during the January-March 2019.
“The economic activity declined significantly during the first quarter,” the National Statistics Bureau said. “This situation has been aggravated by the global health crisis.”