# What would be the GDP of Algeria without Oil & Gas?

Facts :

*Algeria's GDP is 230 B$, *Oil & Gas account for 30% (70 B$)


My simplistic reasoning would say : Substract 70 from 230 and get a new GDP of 160 B$. But I know that the concept of GDP is more complex than that: it also includes government spending : *Government consumption accounts for 30% (70 B$)
*60% of the budget comes from Oil & Gas : 42 B$ So I'll continue substracting: 160 - 42 = 118 B$, the new GDP...

But still, I think it's too high: the household consumption accounts for 35%. Most purchasing power comes from fake jobs created by the government, if there were no Oil & Gas these fake jobs would not exist.

Should I still substract this component from the total GDP?

Is my reasoning correct?

NB: All data come from this website (and I'm not sure if I picked up the right values):

• Welcome to Econ.SE. It is very clear here that most questions and answers - unless emphasized - are positive, not normative. Your added disclaimer, while noble, was hence irrelevant, and I removed it. – FooBar May 3 '15 at 14:54

• So your answer to the question is: 160 B$(230-70)? That would be the new GDP of Algeria if there were no hydrocarbons? – EcoNoob May 3 '15 at 14:56 • If 30% does not account for indirect oil revenues (fake jobs) then you would need an input-output model to estimate the indirect effects of the loss of oil. More on input-output models: economictheories.org/2008/08/… – Giskard May 3 '15 at 19:08 • EcoNoob -- my answer is an answer to the question 'What percentage of national income in Algeria is due to oil and gas?' The answer to that question is 160B$. denesp's answer is trying more to address the question 'What would happen if all oil and gas production disappeared from Algeria tomorrow?' That is a very difficult problem to answer, because the loss of oil and gas might have effects on the rest of the economy. An input-output model is one way to try to get at those effects. – NickJ May 4 '15 at 18:49