(Ecofin Agency) - In spite of efforts by government to reduce the trade deficit caused by the fall in oil prices, Algeria registered a trade deficit of $ 15.8 billion in 2016 against $ 13.7 billion in 2015.

The country, which accounted for 95% of exports of petroleum products, posted export earnings of $ 22.7 billion in October, a decrease of 23.44% from the same period last year.

This situation has greatly weakened the local economy to the point where imports fell by 11.3% at the end of October. Algeria imported 38.5 billion dollars of raw materials compared to the 43.5 billion in October 2015, Morocco World News reports.

An austerity policy was adopted to better cope with the situation. Specifically, it aims to control the trade deficit by blocking investment in certain sectors and by imposing restrictive measures on imports. Quotas are now applied to vehicles, cement and building materials. According to sources, the situation threatens to reduce the Algerian reserve of hard currencies and to restrict the state aid to companies. There is a risk of limiting the country's ability to diversify its exports and hence its economy.

Algerian energy officials are calling for an agreement on freezing production with other OPEC member countries, which is beneficial for the stabilization of its economy.

Anita Fatunji