Deploying billions to fight inflation – The New Tribune

The economic storm that has rocked the world since the Covid-19 pandemic has not spared it. MaghrebSupply chain disruptions and surging commodity prices have fueled severe inflation and weighed on the region’s economies. Ukraine Adding fuel to the fire, energy and food costs are rising sharply. Faced with this huge challenge, Maghreb governments are mobilizing and deploying an impressive financial arsenal to protect the purchasing power of their citizens and stabilize their shaky economies.

Algeria fights price hikes

At the heart of this economic struggle, Algeria has placed itself at the forefront of the fight against inflation. Aware of the social and political problems, the Algerian government has announced a massive subsidy plan of 620 billion dinars for 2024. This huge amount, equivalent to the annual budget of some countries, demonstrates the determination of the authorities to curb the rise in prices and maintain social tranquility.

The Algerian program acts like a real economic shield, protecting basic products from the turbulence of the world market. Cooking oil and white sugar, the real barometer of the household basket, benefit from the 120 billion dinar envelope. This windfall acts as a shock absorber, absorbing the shocks of international prices and maintaining stable prices on the shelves.

Food security is the pillar of national stability

In addition to basic products, Algeria relies heavily on its food autonomy. The cereal sector, the backbone of national agriculture, was allocated the largest share, amounting to 397 billion dinars. This massive injection of funds aims to stimulate local production while guaranteeing affordable prices for consumers. The government is therefore working on two fronts: supporting farmers by increasing purchase prices while subsidizing the selling prices of processors. This policy of a huge budget gap illustrates the complexity of the inflationary challenges facing the country.

The dairy sector has not been left out, benefiting from 102.7 billion dinars of funding. This large sum reflects the strategic importance of milk in the Algerian diet. By setting an annual production target of 3.4 billion liters, the government is seeking to reduce dependence on imports while ensuring a steady supply to the population.

A holistic approach to multidimensional challenges

Algeria’s strategy is not limited to injecting money into key sectors. It takes a global approach, affecting all links of the economic chain. Subsidies for finished products such as baguettes or bags of semolina are aimed at providing direct relief to consumers’ wallets. The allocation of 1.5 billion dinars to compensate for transport costs in the south of the country demonstrates a desire for territorial equity in the face of inflation.

The establishment of the Monitoring and Early Warning Unit reflects the government’s recognition that the fight against inflation is a long-term battle. The task force brings together different ministries and security forces, reflecting a proactive and coordinated approach to addressing economic challenges.

However, Algeria’s ambitious plans raise questions about their long-term sustainability. While the measures provide immediate relief to consumers, they put a heavy strain on public finances. The balance between social support and fiscal stability is critical to the country’s economic future. The success of this strategy will depend on its ability to boost local production and gradually reduce reliance on imports, while navigating the turbulent waters of the post-pandemic global economy.