PUBLIC EXPENDITURE AND ECONOMIC CRISIS IN ALGERIA

The budget policy in Algeria is regarded as an essential factor of economic growth. For this purpose, the public authorities launched out in a vast program of public expenditure. However, in spite of the injection of important sums the economic growth remains weak. The growth costs expensive and the economic reforms are blocked owing to the fact that Algeria of share its wealth gives the impression which it can satisfy the needs for the company without passing by the market. The oil price fall has challenged this policy built on public spending. This has induced a decline in revenues, affecting both the foreign exchange reserves which cover 22.2 months of imports and the public budget. The trade balance deficit reached 13.7 billion dollars in 2015. This reversal of unexpected circumstances produced a deep economic crisis. In this work, we will try in the first part to show that public spending resulted in not only low growth rates but very expensive for the national community. Also, these expenditures have inaugurated a return of government intervention when the Algerian economy began to open up the market. In the second part, we analyze the effects of the oil prices drop on economic balances.