Domestic price pressures will remain high in 2011-12 (inflation will have averaged 4.4% in 2010) owing to robust domestic demand and monopolistic players controlling a number of product markets. A weaker euro should mean that some of Algeria's food imports, particularly from France and other euro zone trading partners, will become cheaper, but the uncompetitive import market will keep domestic prices high. We expect prices of wheat, of which Algeria is one of the world's largest importers, to rise by around 15% next year. Other factors adding to price pressures are high government spending, restrictions on imports and industrial action forcing the government to meet wage demands over and above the recent 25% increase in the minimum wage. The latter will lead to price rises and higher nominal wages at all salary levels. We expect inflation to average 4.2% in 2011 and 4.3% in 2012 as food stocks have been built up after a few years of good harvests. Inflation will begin to creep up again in 2013-15 as the government's investment strategy takes hold.