Outlook for 2011-15

• The Economist Intelligence Unit expects social unrest to pose a serious risk to political stability in the forecast period. After the uprisings across the Arab world, Algerians could mobilise in similar anti-government protests.
• Abdelaziz Bouteflika, the president, won an unprecedented third term in 2009. There is no clear successor for the president, who is now 74, and there are continued rumours of a potential cabinet shuffle.
• Algeria will post fiscal deficits in the forecast period averaging 2.1% of GDP. This is smaller than our previous forecasts as we now expect oil revenue to be higher because of high international prices.
• Real GDP growth will average 4.2% in 2011-15 on the back of government spending and high oil prices. Civil unrest will dampen consumer confidence and hurt private consumption.
• Banque d'Algérie (the central bank) operates a managed float of the Algerian dinar against the US dollar. We expect the dinar to appreciate against the euro over most of the forecast period.
• Energy exports will dominate the current account. We have raised our oil price forecasts in 2011-12, pushing up the trade surplus. Algeria will record current-account surpluses from 2011-13, before moving into a deficit position.

Monthly review

• The president, Abdelaziz Bouteflika, said Algeria would face "political reforms" without providing any specifics. The prime minister, Ahmed Ouyahia, meanwhile, denied the possibility of a cabinet reshuffle.
• The industry minister, Mohammed Benmeradi, has said there will be no changes to Algeria's restrictive import policies. His finance counterpart, Karim Djoudi, said that there will be a supplementary budget in the summer.
• The establishment of a Renault plant in Algeria was said to be "well advanced". The French carmaker has long been rumoured to be setting up operations in Algeria, but the process is likely to be protracted.
• The latest oil and gas exploration licensing round failed to attract serious interest, with only two of the ten blocks on offer awarded (including one to state oil and gas company, Sonatrach).
• The energy minister, Youcef Yousfi, announced that Algeria was interested in developing its shale gas reserves. The country faces a potential supply crunch over the next few years as rising domestic consumption will cut into exports.
• Inflation averaged 3.9% in 2010, down from 5.7% in 2009. This trend is unlikely to continue as both energy and food prices will be higher in 2011.