The government has depleted the Fonds de Regulation des Recettes (FRR -- Algeria's oil stabilisation fund) that it set up in 2000 to help finance fiscal deficits, and announced plans to use “unconventional financing”, or direct borrowing from the central bank, to cover the deficit and meet domestic debt obligations during a five-year period of structural reforms, aimed at achieving budget equilibrium.
Unblocking funds for social investment projects such as housing will help to generate growth and jobs in the non-oil sector.
The government aims to keep a lid on current spending, and is garnering more non-oil revenue from tax hikes that went into effect in 2017.
The projected fiscal deficit will be 9% of GDP in 2018, and the target date for balancing the budget has been extended from 2019 to 2023.
