Risk of slowing global growth in 2024: will Algeria be impacted?

From crisis to crisis, the world economy has entered a vicious circle. This economy, which depends on global growth, is severely impacted by purely economic and other geopolitical factors. The World Economic Forum warned in a recent report of a slowdown in global growth in 2024. This slowdown is notably due to rising interest rates, energy prices and the wars in Ukraine and Palestine. Will Algeria, whose economy is almost dependent on hydrocarbons, be impacted by this slowdown? 

It must be emphasized that the global economy is in bad shape. “Six in ten economists surveyed for the World Economic Forum Chief Economists' Outlook report view the global economic outlook as anemic and expect overall conditions to weaken over the year to come,” notes the Forum. This analysis, which is based on projections made by renowned banks and a Reuters poll of economists, forecasts a slowdown in global growth to 2,6% in 2024 compared to 2,9% this year.

Europe will feel the slowdown

“The data highlights the impact of rising prices on consumer spending and the challenges businesses face, particularly in the context of falling demand from China,” indicates this report which notably highlights ahead of the economic difficulties of Europe and the United Kingdom. Regarding the Chinese economy, it could weaken with companies' quest for relocation.

The bank Goldman Sachs indicates for its part that “the economy is heading towards higher growth with annual growth of 2,6%, exceeding the forecast of 2,1% established by Bloomberg economists”. Analysts at this bank explain that the peak of interest rate increases has been passed and that monetary and fiscal tightening policies have achieved most of their impact on the global economy. Optimism restored questioned by the president of the Fed, who estimated that the fight against inflation has not yet achieved its objective and that further increases in interest rates could be necessary.

Slowdown in global growth: what impact on Algeria?

The Algerian economy is highly dependent on the world economy, particularly due to hydrocarbons. Indeed, most of Algeria's revenue comes from the export of oil and gas. The slowdown in the global economy is having a big impact on oil demand. If demand for oil declines, prices automatically follow. Algeria will therefore be impacted by this decline given that it will sell its oil less expensively, which will reduce its revenues.