Algeria to slash spending after coronavirus-induced oil price crash

Oil producer Algeria decided Sunday to reduce its public spending in the wake of a coronavirus-induced collapse in hydrocarbon prices that has destroyed revenue projections for the current year.

At the end of a cabinet meeting chaired by President Abdelmadjid Tebboune, the presidency announced the state's operating budget would be slashed by 30 percent, without specifying the new level of spending.

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The 2020 budget had been based on an oil price of $60 per barrel, but prices dipped to $22.50 at one stage last week, due to the impact of the deadly new coronavirus on global demand and a price war among major oil producers.

Algeria's state oil giant Sonatrach would be required to halve operating and capital expenditure from the $14 billion set out previously to $7 billion in order to preserve the nation's foreign currency reserves, the statement said.

But the government would not slash civil servants' wages and it hoped not to have to reduce spending on health or education, it added.