Algeria Economic Outlook
GDP rose 3.2% in 2022. This figure was above the 10-year average of 1.9% but below slightly last year’s print. Compared to the prior year, the hydrocarbons sector weakened dramatically in 2022, contracting 0.6% (2021: +10.5%). The decline was largely due to a fall in LNG output linked to the closure of the Maghreb pipeline in late 2021. Meanwhile, the non-hydrocarbons sector grew 4.3% (2021: +2.3%). Looking at expenditure components, private spending, fixed investment and exports slowed, while public spending accelerated. Turning to 2023, oil output expanded 3.1% year on year in January–April (2022: 11.9%). In the same period, inflation remained near double-digits, likely crimping private spending. Meanwhile, a recent drought should knock wheat yields to around 20% below the five-year average this year, likely hitting agricultural output and stoking inflation.
Algeria Inflation
Inflation fell to 9.6% in April from 10.2% in March. Price pressures continued to be fanned by red-hot food prices. Inflation is seen cooling later in 2023 thanks to government subsidies and a tougher base effect. Key factors to watch include the recent drought’s effects on agriculture and the fate of the Ukraine grain corridor.
This chart displays Economic Growth (GDP, annual variation in %) for Algeria from 2013 to 2022.