ALGIERS, July 14 (Reuters) - Algeria's foreign exchange reserves are expected to fall to $116 billion by the end of 2016 due lower oil prices, and the government is planning further cuts to curb spending over the next few years, Prime Minister Abdelmalek Sellal said on Thursday.

The oil price slump has forced Algeria to cut its budget by 9 percent this year, mainly through suspending infrastructure projects.

Energy earnings, which make up 95 percent of the OPEC member's exports and 60 percent of the state budget, fell 41 percent to $35.72 billion last year.

The North African country's reserves dropped $6.1 billion to $136.9 billion in the first five months of 2016.

"State policy will not be directed towards austerity, but there will be a decrease in spending," Sellal said, according to the state news agency APS. He did not give details on future cuts.

(Reporting by Hamid Ould Ahmed; Editing by Aidan Lewis and David Evans) ((hamid.ouldahmed@thomsonreuters.com;))