Algeria cuts energy revenue, forex forecasts for 2020

ALGIERS, May 3 (Reuters) - Algeria expects its foreign exchange reserves to fall to $44.2 billion by the end of 2020, below a previous forecast of $51.6 billion, hit by a sharp drop in global crude oil prices, the government said on Sunday.

The price slide is expected to push down full-year energy export earnings to $20.6 billion, far below a $37.4 billion projection announced earlier this year, government spokesman and Communication Minister Amar Belhimer said on state radio.

OPEC producers’ group member Algeria depends heavily on oil and gas revenue to finance the state budget and pay for imports estimated annually at $45 billion.

A fall in energy earnings over past years has significantly widened its budget and trade deficits.

Financial pressures increased after the coronavirus outbreak caused oil prices to plunge further, forcing the government to cut spending and investment planned for this year in several sectors including hydrocarbons.

That also impacted foreign exchange reserves which are currently around $60 billion, down from $72.6 billion in April last year. The amount of reserves expected by the end of 2020 will cover a year of imports, Belhimer said. (Reporting by Hamid Ould Ahmed; Editing by Andrew Cawthorne)