Algeria Economic Outlook
A hydrocarbon-dependent economy:
Algeria’s economy is heavily reliant on oil and natural gas, which account for over 90% of export revenues and two-thirds of government income. The country holds significant hydrocarbon reserves, making it a key supplier of energy to Europe. However, its economic dependence on fossil fuels makes Algeria vulnerable to fluctuations in global oil and gas prices.
Challenges in economic diversification:The government has repeatedly pledged to diversify the economy, with efforts to boost agriculture, manufacturing, and renewable energy. However, bureaucracy, a lack of foreign investment, and a challenging business environment have slowed progress. Import restrictions aimed at promoting local industries have had mixed results, sometimes leading to supply shortages rather than industrial growth.
Unemployment and social pressures:Algeria faces high unemployment, particularly among young people, who make up a large portion of the population. While the government has used subsidies and public sector jobs to maintain social stability, economic reforms are needed to create a more dynamic private sector. Additionally, inflation and purchasing power concerns have fueled periodic protests, highlighting economic discontent.
Algeria’s economic outlook:Algeria’s prospects remain tied to global energy prices, with high oil and gas revenues supporting government spending. However, long-term economic sustainability will depend on successful diversification efforts, attracting foreign investment, and addressing structural economic challenges. Without significant reforms, Algeria risks continued overreliance on hydrocarbons and exposure to energy market volatility.
Algeria's Macroeconomic Analysis:
Nominal GDP of USD 240 billion in 2023.
Nominal GDP of USD 240 billion in 2023.
Nominal GDP of USD 240 billion in 2023.
GDP per capita of USD 5,214 compared to the global average of USD 10,589.
GDP per capita of USD 5,214 compared to the global average of USD 10,589.
GDP per capita of USD 5,214 compared to the global average of USD 10,589.
Average real GDP growth of 2.2% over the last decade.
Average real GDP growth of 2.2% over the last decade.
Average real GDP growth of 2.2% over the last decade.
Sector Analysis
In 2022, services accounted for 45.1% of overall GDP, manufacturing 7.8%, other industrial activity 33.9%, and agriculture 13.2%. Looking at GDP by expenditure, private consumption accounted for 41.2% of GDP in 2023, government consumption 16.9%, fixed investment 37.7%, and net exports 4.2%.International trade
In 2017, manufactured products made up 2.7% of total merchandise exports, mineral fuels 96.1%, food 1.0%, ores and metals 0.2% and agricultural raw materials 0.1%, with other categories accounting for -0.1% of the total. In the same period, manufactured products made up 73.0% of total merchandise imports, mineral fuels 4.2%, food 20.2%, ores and metals 1.5% and agricultural raw materials 1.1%, with other goods accounting for 0.0% of the total. Total exports were worth USD 51.40 billion in 2024, while total imports were USD 47.50 billion.Main Economic Indicators
Economic growthThe economy recorded average annual growth of 2.2% in the decade to 2023. To read more about GDP growth in Algeria, go to our dedicated page.
Fiscal policy
Algeria's fiscal deficit averaged 8.1% of GDP in the decade to 2024. Find out more on our dedicated page.
Unemployment
The unemployment rate averaged 11.8% in the decade to 2023. For more information on Algeria's unemployment click here.
Inflation
Inflation averaged 5.2% in the decade to 2024. Go to our Algeria inflation page for extra insight.
Monetary Policy
Algeria's monetary policy rate ended 2024 at 3.00%, down from 4.00% a decade earlier. See our Algeria monetary policy page for additional details.
Exchange Rate
From end-2014 to end-2024 the dinar weakened by 35.2% vs the U.S. dollar. For more info on the dinar, click here.
Economic situation in Algeria
According to recently released national accounts data, the economy expanded at a faster 4.2% year-on-year clip in the final quarter of 2024, up from an upwardly revised 2.3% in Q3 and slightly exceeding market expectations. Accordingly, GDP will have expanded 3.6% overall in 2024, below the prior year’s 4.1% rise. Zooming in to Q4, the upturn was spearheaded by faster expansions in private and public spending. Less positively, exports slowed, with growth of hydrocarbons shipments waning, and fixed investment fell more quickly. Moving to Q1, GDP growth should have slowed down. That said, available data is upbeat: Oil production rose annually for the first time in two years in Q1. In other news, on 19 May, the Islamic Development Bank said it would loan USD 3 billion over through 2028 to support key development projects such as railways, boding well for fixed investment.Algeria Economic Forecasts
Projections out to 2034.49 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 15 expert analysts.
Want to get insight on the economic outlook for Algeria in the coming years? FocusEconomics collects projections out to 2034 on 49 economic indicators for Algeria from a panel of 15 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the Algeria economy. To download a sample report on the Algeria's economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.