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.
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.
Sector Analysis
In 2022, services accounted for 45% of overall GDP, manufacturing 8%, other industrial activity 34%, and agriculture 13%. Looking at GDP by expenditure, private consumption accounted for 41% of GDP in 2023, government consumption 17%, fixed investment 38%, and net exports 4%.International trade
In 2017, manufactured products made up 3% of total merchandise exports, mineral fuels 96%, food 1%, ores and metals 0% and agricultural raw materials 0%, with other categories accounting for 0% of the total. In the same period, manufactured products made up 73% of total merchandise imports, mineral fuels 4%, food 20%, ores and metals 1% and agricultural raw materials 1%, with other goods accounting for 1% of the total. Total exports were worth USD 55 billion in 2023, while total imports were USD 43 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
Annual economic growth should have inched up in Q4 from Q3’s slowdown, partly on a lower base of comparison. Domestically, inflation averaged below Q3 in Q4, supporting private spending. Meanwhile, the hydrocarbons sector remained in the doldrums: Oil production fell at a sharper clip than in Q3, while gas and LNG output shrank further. Accordingly, merchandise exports continued to decline through November. Turning to 2025, improved rainfall allows for cautious optimism; dam fill levels rose to 35% in January, and only patches of drought remained in the north, boding well for harvests this year. In other news, on 11 February, Niger, Nigeria and Algeria signed agreements to fast-track the development of the USD 13 billion Trans-Saharan Gas Pipeline project; that said, uncertainty regarding the plan remains elevated.Algeria Economic Forecasts
Projections out to 2034.48 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 14 expert analysts.
Want to get insight on the economic outlook for Algeria in the coming years? FocusEconomics collects projections out to 2034 on 48 economic indicators for Algeria from a panel of 14 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.