Algeria Economic Forecast

Algeria Economic Outlook

May 10, 2022

GDP remained below its pre-pandemic level at the end of 2021. Turning to H1 2022, the hydrocarbon sector—which constitutes around 95% of the country’s exports—is driving the ongoing recovery. Oil production was up 12.6% year on year in Q1 thanks to increased OPEC+ quotas. Gas exports to Europe surged by over 9% yoy in Q1, with a new deal with Italy the latest European move to diversify away from Russian energy. High energy prices are boosting the external and fiscal balances and encouraging new hydrocarbon investment, boding well for output ahead. This said, a lack of prior investment and the closure of a pipeline last year will cap output. Turning to the non-hydrocarbons sector, activity is likely more muted. The war in Ukraine and a drought have sent food prices spiraling. Recent VAT cuts and a new unemployment benefit will be likely unable to fully cushion the hit to private spending.

Algeria Economic Growth

This month, our panel substantially upgraded its 2022 growth forecasts. Continued increases in OPEC+ quotas, European gas demand and new investment will boost the hydrocarbons sector. That said, growth will likely be one of the lowest in MENA. It will be at least several months before new investment boosts hydrocarbon output, while the non-hydrocarbons sector will drag on growth. FocusEconomics panelists foresee the economy growing 3.1% in 2022, which is up 0.5 percentage points from last month’s forecast, and 2.4% in 2023.

Algeria Economy Data

2015 2016 2017 2018 2019
Population (million)40.040.841.742.643.4
GDP per capita (USD)4,1533,9194,0124,0813,914
GDP (USD bn)166160167174170
Economic Growth (GDP, annual variation in %)3.73.21.31.40.8
Consumption (annual variation in %)3.62.62.22.71.9
Investment (annual variation in %)5.73.53.43.11.0
Industrial Production (annual variation in %)1.91.52.4-1.52.7
Unemployment Rate11.210.511.711.7-  
Fiscal Balance (% of GDP)-15.3-13.1-6.6-4.5-5.1
Public Debt (% of GDP)8.720.527.138.146.3
Money (annual variation in %)11.73.514.40.5-  
Inflation Rate (CPI, annual variation in %)4.45.85.93.52.4
Policy Interest Rate (%)4.003.503.753.753.75
Exchange Rate (vs USD)107.1110.4114.8118.3119.1
Exchange Rate (vs USD, aop)100.4109.4110.9116.6119.4
Current Account (% of GDP)-16.4-16.4-13.2-9.6-  
Current Account Balance (USD bn)-27.3-26.2-22.1-16.7-  
Trade Balance (USD billion)-18.1-20.1-14.4-7.5-  
Exports (USD billion)34.629.334.641.1-  
Imports (USD billion)52.749.449.048.6-  
Exports (annual variation in %)-42.5-15.218.018.9-  
Imports (annual variation in %)-11.8-6.1-0.9-0.9-  
International Reserves (USD)14511497.680.2-  
External Debt (% of GDP)2.83.43.43.3-  

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Algeria Facts

Value Change Date
Exchange Rate119.1-0.11 %Jan 01

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