IslamicFinance.de

Algeria’s new government will introduce Islamic finance and develop its stock market to draw more investment into the economy. The country currently struggles to cope with a sharp fall in energy earnings. Prime Minister Ahmed Ouyahia plans wider reforms and the start of fracking for shale hydrocarbons to boost oil and gas revenue. Algeria's finances have been hit by a more than 50% drop in crude oil prices since mid-2014, the government said 2017 would end with real difficulties, while 2018 looked to be even more complex. Algeria has failed in the past to modernise its stock market and has a very low level of liquidity. Its firms currently rely on state finances, which in turn depend on the oil and gas sector. The government plans to continue spending cuts, including subsidies, but analysts say spending cuts alone may not be enough to tackle the crisis. Foreign exchange reserves fell to $105 billion in July this year from $193 billion in May 2014.