IMF grants Algeria $300 million loan

The International Monetary Fund on Wednesday approved a $300 million loan to help Algeria deal with a temporary shortfall in export revenues caused by low oil prices.

The fund said in a statement the $300 million loan was being made under its Compensatory and Contingency Financing Facility which is designed to help countries deal with the effects of trade problems.

The loans are repayable in up to five years.

Almost all of Algeria's exports come from the petroleum sector which accounts for one quarter of gross domestic product and contributes more than half of government revenues.

Despite a slight increase in oil prices, Algeria's oil exports for the year ending June 30, 1999, are expected to be $1.9 billion lower than the year before.

The fund noted that despite the lower oil exports, Algeria still managed to grow GDP in 1998 by about 4 percent thanks to a strong recovery of the agricultural sector and a turnaround in industrial activity.