Economic studies


Population 44.5 million
GDP per capita 3,659 US$
Country risk assessment
Business Climate
Change country
Compare countries
You've already selected this country.
0 country selected
Clear all
Add a country
Add a country
Add a country
Add a country


major macro economic indicators

  2020 2021 2022 2023 (e) 2024 (f)
GDP growth (%) -5.1 3.4 3.2 3.6 3.7
Inflation (yearly average, %) 2.4 7.2 9.3 9.0 7.0
Budget balance (% GDP) -11.9 -7.2 -2.9 -7.0 -9.5
Current account balance (% GDP) -12.8 -2.8 9.7 3.0 1.0
Public debt (% GDP) 52.0 62.8 55.6 55.0 58.0

(e): Estimate (f): Forecast


  • Large oil and gas reserves; significant potential for shale gas development
  • Potential in agriculture, renewable energy and tourism
  • Favorable geographical position, close to the European market
  • Low external debt (1.6% of GDP by end 2022)


  • High dependence on hydrocarbon revenues (90% of exports and 60% of budget revenues)
  • Years of under-investment in oil and gas, which is weighing on the country's capacity to increase production in the short term
  • High youth unemployment (29% by 2022), low opportunities for graduates
  • Excessive weight of an inefficient public sector
  • Public deficit financed by drawing on reserves and monetisation by the central bank
  • Poor infrastructure
  • Bureaucratic red tape, corruption, financial sector weaknesses and uncertain business environment
  • Disruptive parallel Algerian dinar market

RIsk AssessmenT

Robust but uncertain economic outlook due to heavy dependence on hydrocarbons

Economic growth slightly increased in 2023. Revenues from hydrocarbons stabilised, with a drop in oil exports due to the erosion of barrel prices and limited production capacity, balanced by a rebound in gas exports to Europe, although the government's target of doubling gas exports to 100 billion m3 by 2027 would seem hard to achieve. Non-hydrocarbon production increased with construction and services, despite poor crops caused by drought. In 2024, economic growth should remain robust despite oil production being durably restricted to the same 1,007 thousand barrels/day OPEC quota (voluntarily reduced by 51,000 bpd in Q1), while the average oil price is expected to stabilise. The gas sector will continue to expand thanks to strong demand from European countries which are still looking for alternative energy sources to Russian gas, notably by stepping up investment projects in liquefied natural gas. Agricultural production (around 9% of GDP) could rebound assuming a return to normal rainfall. Heavy dependence on hydrocarbons makes the economic outlook uncertain, while domestic and foreign investment in non-hydrocarbon sectors remains low. Despite ongoing subsidies, private consumption will remain weak due to the loss of purchasing power associated with persistent inflation. Although price tensions will gradually ease, higher wheat import volumes and elevated prices will contribute to maintaining inflation well above the Bank of Algeria's target of 3.5%. Nevertheless, the Bank is likely to maintain an accommodating monetary policy (key rate at 3%) to revitalise private consumption and ensure a durably low cost of financing the budget deficit. In addition, public spending, particularly in the construction sector, will remain sustained, with presidential elections planned in December 2024.

Weak public finances and shrinking current account surplus

With hydrocarbon revenues down on 2022, and higher public spending (38% of GDP), the 2023 budget deficit widened considerably. Among priority spending items, the government has financed a gradual 50% pay rise for public-sector workers out to 2024, an increase in retirement benefits for the poorest of the population as well as increased unemployment benefits. The budget deficit is set to increase considerably in 2024, as the government approved the largest budget in Algeria’s history for 2024 (USD 113 billion in public spending, equivalent to a 6% increase). The budget includes maintaining social spending (notably food and energy subsidies) to support household purchasing power and avoid political unrest in the run-up to the presidential election in December. Businesses will also benefit from tax cuts. Public investment is also set to increase and will mainly be directed towards housing, infrastructure projects, and defence. On the other hand, budget revenues will remain sluggish in line with oil sector receipts. With its low level of external debt and historical reluctance to seek foreign assistance to finance its public deficit, Algeria will continue to rely heavily on monetary financing via the central bank, as well as on foreign exchange reserves.
The trajectory of Algeria's external balance remains highly sensitive to the volatility of global energy prices and gas export capacity. As a result, the current account surplus shrank in 2023, due to eroding hydrocarbon export volumes and prices. In addition, the import bill rose because of the partial lifting of restrictions, notably on motor vehicles, and the increase in imports of services (estimated at +4.4% in 2023). The current account surplus will continue to shrink despite the improvement in gas production capacity, further erosion of gas prices, the absence of an undisputed uptick in oil prices and import pressures ahead of the election period. Furthermore, despite the various government incentives introduced to attract foreign investors (removal of the so-called "51/49" restriction in non-strategic sectors, improved tax conditions and contract flexibility in the hydrocarbons sector), FDI inflows will remain low (0.8% of GDP forecast for 2024), except for the gas sector. With the current account balance set to worsen, and the public deficit set to continue to be partly financed by foreign exchange, foreign exchange reserves are likely to fall to the equivalent of 12 months' import cover from 14 months at end-2023. This level nevertheless remains very comfortable, enabling the Bank of Algeria to support the dinar's value.


Between diplomatic tensions and presidential elections

Following the forced resignation of former President Bouteflika in 2019 in the wake of the Hirak protests, Abdelmadjid Tebboune came to power following his election as President, with army support. He enjoys a substantial financial windfall from hydrocarbon prices that has so far enabled the government to contain social discontent and ensure domestic stability until the presidential election in December 2024. Against a backdrop of significant economic tensions, including persistent inflation and high unemployment, particularly among the country’s youth, the authorities are expected to step up their support for people and business by increasing subsidies and public investment. In addition, the ministerial reshuffle in March 2023 that saw the ousting of certain ministers who took part in the repression of the Hirak movement, and the replacement of the Prime Minister in November, could raise President Tebboune’s popularity, thereby reinforcing the probability that he will stand for re-election.
Since the breakdown of diplomatic relations with neighbouring Morocco and the closure of the Maghreb-Europe gas pipeline in 2021, tensions have escalated between the two countries over sovereignty over the Western Sahara and relations with Israel. More recently, the rejection of Algeria's offer of assistance to Morocco following the earthquake in early September 2023 further undermined any hope of a short-term alleviation of tension between the two nations. Algeria continues to balance its relations with the West (including Spain with which diplomatic relations had been suspended in 2022) and Russia, which remains its preferred arms supplier. Following his visit to Russia in June 2023, President Tebboune reaffirmed the special relationship between Algiers and Moscow by signing an agreement to deepen their strategic partnership in the military and hydrocarbon fields. A state visit to France by President Tebboune was postponed but could take place in 2024. Furthermore, Algeria and China are continuing to develop their bilateral cooperation under the Belt and Road Initiative.


Last updated: March 2024