Following a strong slowdown in growth in the ﬁrst half of 2017, the government eased its ﬁscal consolidation program during the last quarter of 2017 and in the ﬁrst half of 2018. This ﬁscal relaxation coincides with a sharp increase in the international price of oil. This price eﬀect more than oﬀset the decline in production (-1.3 percent expected for 2018). As a result, real GDP is expected to grow by 2.5 percent, up from 1.6 percent in 2017, driven by the demand side. However, in the ﬁrst quarter of 2018, real GDP grew by just 1.3 percent (compared to 3.4 percent for the same period in 2017), due to supply side constraints, such a signiﬁcant decline in hydrocarbon production (-2.0 percent).
In 2019 and 2020, a slight increase in hydrocarbon production will be oﬀset by a slowdown in non-hydrocarbon sector which most likely would bear the brunt of the programmed ﬁscal consolidation. This policy eﬀort could recommence as early as in mid-2019, although the timing will depend on the availability of ﬁscal space and pressure on reserves over the next year.