Outlook Algeria: Optimism Abounds
There are lots of reasons for optimism about the future of economic growth in Algeria: reliable GDP and population growth, an economic diversification drive and solid hydrocarbon production. Another reason is found in the eye-glazing term “labor productivity.” In Algeria, it’s forecast to go up, spelling good news for wages and living standards.
First, some more familiar numbers. The Economist Intelligence Unit (EIU) predicts that in 2013 real GDP growth in Algeria will be 3.2%. That’s higher than the global average (2.8%) and more than other hydrocarbon producers such as Russia (2.2%). It’s also above the Middle East and North Africa average of 2.9%. Over the 2013-2017 medium term, real growth is expected to average 3.5% a year; and longer term, growth is forecast at 5.3% a year during 2021-2030.
As for labor productivity growth, the EIU expects it to rise by an average 2.6% a year between 2012-2020, and then to grow at a much larger rate of 4.6% between 2021-2030. This is particularly good news because, as noted above, rising labor productivity, even more than GDP, is a good proxy for rising wages and improving living standards.
As explained by Investopedia, labor productivity growth depends on three main factors: investment and saving in physical capital, new technology, and human capital.
Algeria is moving forward in all these areas, as was discussed this week at the GE-organized ‘Algeria’s Economic Outlook: The Drivers of Growth & Development,’ a full-day conference in Algiers.
Programmed by The Economist Events, the conference presented one of the most comprehensive overviews of the country’s economy today, as well as the opportunities in the energy sector, particularly renewables, and in healthcare and infrastructure development.
In a series of panel discussions, the event reviewed and analyzed the economic forecasts for the country through 2018, the future of Algeria’s energy sector, and the national healthcare reform plans. Each panel was attended by industry experts who presented evidence-based insights.
The panelists outlined the significant steps that the Algerian government is taking to increase private-sector involvement in the economy – including foreign investment –its efforts to reduce chronic unemployment, and the steps being taken to improve the skills base of the population.
For 40 years, GE has been partnering with Algeria and making long-term investments in Algeria’s public and private sectors, including healthcare, water, oil & gas, power and aviation. It operates training facilities and skills development programs in the country, including the GE Healthcare Advanced Applications Center. GE also supports in-country, value-adding service operations such as ALGESCO, a dedicated turbomachinery service center and the largest GE facility of its kind globally.
For more on GE’s many operations, services and other activities across Algeria, click here.