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The International Monetary Fund (IMF) expects Algeria's foreign exchange reserves to decline by 61% over six years, dropping from $51 billion at the end of 2025 to $19.8 billion by 2031. This decline is due to persistent current account deficits and declining oil and gas revenues. This decrease will weaken Algeria's capacity to cover its imports of goods and services, with the coverage period shrinking from 8.6 months in 2025 to just 3.3 months in 2031. The IMF attributes the decline to an increased current account deficit resulting from higher imports and decreased oil exports, with the deficit expected to persist until 2031, albeit with a temporary improvement due to rising oil prices. The report also warns that ongoing budget deficits and expanding monetary financing will increase public debt and threaten economic stability. It urges Algeria to tighten fiscal policies and improve non-oil revenues to diversify its economy.
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