In-Depth Analysis
Algeria
The Algerian economy relies on hydrocarbon exports and state-centred economic management. The Covid-19-induced slump in global oil and gas demand has prompted aggressive oil production cuts. This coupled with low global oil and gas prices has worsened the economy’s outlook. Authorities plan to diversify the economy and boost manufacturing and other sectors, but such restructuring can take decades to implement.
The IMF notes, in their Article IV consultation, that a recovery in the Algerian economy is underway, “but the outlook remains challenging”. We lowered our real GDP growth estimate for 2021 to 1.3%, following data that showed a 2.8% q-o-q contraction in Q2 2021. Thereafter Algeria was hit by the third (Delta) and fourth (Omicron) waves of Covid-19 infections. We estimate that this led to a significant slump in demand for both goods and services and hence hampered the economic recovery in H2 2021. For 2022, we expect that structural reforms announced by the government regarding spending on subsidies, together with the recovery in global hydrocarbon prices and stronger local oil and gas production should boost fiscal coffers. (Source: Algeria Quarterly Update, published January 2022.)
Macroeconomic Data
(2021)
Fiscal Balance (as a % of GDP)
Consumer Price Index (% change y-o-y, avg)
Current Account Balance (as a % of GDP)
Real GDP (annual % change)
GDP per Capita, US$
Import Cover (months)
Population, million
Total External Debt (as a % of GDP)
-2.1
6.7
-0.9
1.3
3,785.8
12.26
44.6
3.1