Plummeting oil prices since 2014 have resulted in sharply deteriorating economic fundamentals in Algeria and inspired a downgrade of the short-term political risk classification to category 3 (from 2) in January 2016. Since then, there has been a rebound in oil prices, which has led to a narrowing current-account deficit and eased pressure on the rapidly declining foreign exchange reserves. Moreover, the country is preparing to speed up the diversification of its oil-reliant economy as illustrated by the new investment law and the finance law for 2017. As such, Credendo Group judges that the time is right to upgrade the short-term political risk classification to category 2 (from 3).