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Economic and political overview

Economic Overview

The Algerian economy is mainly driven by hydrocarbons and public investment. Non-extractive GDP growth was broad-based, supported by resilient agricultural output. However, extractive GDP contracted by 1.4% in 2024 due to a reduced crude oil production quota and weaker European gas demand. For 2025 and 2026, GDP growth is forecasted to decelerate marginally to 3% and 2.5%, respectively. As hydrocarbon production slows, financing constraints limit budget spending, while structural bottlenecks hinder private sector growth (IMF).

In recent years, continued large fiscal and external current account deficits have reduced policy space as public debt increased significantly and international reserves declined. After narrowing to 2.3% of GDP in 2023, Algeria’s current account reached balance in H1-2024, as export prices and volumes declined while imports remained high, driven by investment. Foreign exchange reserves fell, covering an estimated 12.3 months of imports in 2025 against 14.0 months in 2024. The fiscal deficit, which stood at 5.2% of GDP in 2023, widened further ... The deficit was mainly financed through oil savings (EU Commission).% in 2024, driven by lower hydrocarbon revenues and rising expenditures, including the final phase of public sector wage increases, before narrowing to an estimated 10.2% in 2025. The deficit was mainly financed through oil savings (IMF). Meanwhile, the debt-to-GDP ratio decreased to an estimated 45.7% last year (from 48.6% in 2023) but is expected to follow an upward trend over the forecast horizon, reaching 59.2% by 2026 IMF). Inflation slowed to 4.3% year-on-year in the first nine months of 2024, driven by stabilizing fresh food prices. Inflation had been rising since 2021, peaking at 9.3% in 2022 and stabilizing in 2023. Food price inflation, particularly for fresh items, hit vulnerable populations hard, as food makes up over half of expenditures for the bottom 40%. However, prices for fruits, vegetables, meat, and fish began to decline in mid-2023, helped by resilient agriculture and meat imports. This, along with a stable exchange rate and moderating import prices, contributed to the overall inflation slowdown. Monetary policy remains accommodative, with accelerated growth in the money supply and increased credit to the private sector.

Unemployment rates have returned to pre-pandemic levels. According to World Bank estimates for 2024 (latest data available), the overall unemployment rate stood at 12.7%, female unemployment at 25.4%, and youth (15-24) unemployment at 29.3%. Algeria has a low GDP per capita, estimated at USD 18,343 in 2024 by the IMF (PPP). There are also big differences between living conditions in cities and rural areas, and instability caused by radical groups on Algeria's borders remains a risk factor.

 
Main Indicators 2025 (E)2026 (E)2027 (E)2028 (E)2029 (E)
GDP (billions USD) 285.72317.17319.16319.48322.96
GDP (Constant Prices, Annual % Change) 3.83.82.92.72.7
GDP per Capita (USD) 6,0476,6286,5916,5196,512
General Government Balance (in % of GDP) -10.2-10.2-9.7-9.5-8.8
General Government Gross Debt (in % of GDP) 54.159.266.472.777.3
Inflation Rate (%) 1.42.93.03.03.3
Current Account (billions USD) -22.05-3.76-8.03-9.16-7.89
Current Account (in % of GDP) -7.7-1.2-2.5-2.9-2.4

Source: IMF – World Economic Outlook Database , Latest data available

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

Agriculture accounts for 14.5% of Algeria’s GDP and employs 9% of the workforce (World Bank, latest data available). The main crops are wheat, barley, oats, citrus, wine grapes, olives, tobacco and dates. Algeria also produces a large quantity of cork and is an important livestock farmer. The country heavily depends on cereal grain imports, with soft (common, milling) wheat being the primary staple to meet consumption needs. In the 2025/26 season, cereal imports remained high, with wheat imports estimated at around 9.2 million tonnes. In late 2023, the government introduced the “Strategic plan for the development of cereal production in Algeria 2023-2028”, aimed at developing the soft wheat, maize, sugar and oilseeds sectors to reduce the annual food import bill. National wheat production was anticipated at 3 million tonnes in the 2025/26 season, that of barley at 1.2 million (USDA).

The secondary sector represents 34.8% of GDP, employing 32% of the active population. The oil and gas sector accounts for most of the federal income and almost all of its export income (it represents over 90% of total exports). Algeria is among the top ten largest gas exporters in the world, it ranks 16th in oil reserves and 10th in confirmed gas reserves. The ores mined in large quantities are iron, lead, phosphate, uranium, zinc, salt and coal. The main activities of the manufacturing sector are industrial food processing, textile and chemical products, metals and construction materials. The manufacturing sector as a whole accounts for 9% of GDP (World Bank). Figures from the Ministry of Industry show that in the first three quarters of 2024, the public industrial sector recorded a growth rate of over 3.3% compared to the previous year.

The tertiary sector contributes to 45.7% of the GDP and employs 58% of the workforce. Algeria's banking sector is dominated by public banks, which suffer from high levels of non-performing loans to state-owned enterprises. Of the 20 banks operating in Algeria, six state-run banks retain the lion’s share of the market. With over 1,600 km of Mediterranean coastline, important cultural and historical sites, and the striking desert landscapes of the Sahara, Algeria has long held considerable potential for tourism. Nevertheless, the sector still accounts for a small part of GDP.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 9.48 32.26 58.25
Value Added (in % of GDP) 14.51 34.80 45.68
Value Added (Annual % Change) 5.19 3.59 3.63

Source: World Bank - Latest available data.

 
Monetary Indicators 20212022202320242025
Algerian Dinar (DZD) - Average Annual Exchange Rate For 1 USD 135.06141.99135.84134.05131.61

Source: World Bank - Latest available data.

 

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Foreign Trade

Algeria has an open economy in which foreign trade represents 39% of GDP (World Bank, 2025). Natural gas and petroleum products account for nearly all exports: according to Comtrade (2024, latest detailed data available), petroleum gas made up 47.9% of total exports, crude oil 27.4%, and refined petroleum products 16.1%, followed by nitrogen fertilizers (1.8%). Imports were led by food products: wheat (6.3%), milk and cream (3.0%), sugar and maize (2.5% each), and iron ores (2.2%).

In 2024, Algeria's first customer was Italy (24.0% of total exports), ahead of France (14.6%), Spain (12.3%), Türkiye (6.7%), and the United States (5.0%); whereas China was the top supplier with a market share of 22.3%, followed by Italy (6.7%), France (6.6%), Brazil (6.4%), and Türkiye (5.4% - data Comtrade). To boost its foreign trade, Algeria signed several trade agreements, as well as ratifying the Agreement on the African Continental Free Trade Area (AfCFTA) in 2019 in Accra, Ghana. The agreement allows interested states to benefit from the progressive elimination of tariff barriers for a period of five years from its entry into force in July 2020. The agreement aims to free African states from dependence on the extraction of raw materials and promote inter-African trade.

While the trade balance was historically positive, the surplus has vanished completely since late 2012 and the country has had a trade deficit since 2014. This reduction was due to a sharp fall in hydrocarbon exports. Incomes have also decreased drastically with the fall of oil prices. Nevertheless, such a trend reversed in 2021 thanks to the uptick in energy prices and it improved further in 2022-23 as Algeria benefited from the consequences of the EU sanctions towards Russia, which led to an increase in European hydrocarbon imports from Algeria. Data from the World Bank shows that the country’s trade balance was negative by an estimated 5.3% of GDP in 2025 (from -0.4% one year earlier). In the same year, exports of goods totalled USD 45.4 billion (-7.5% y-o-y); whereas imports grew by +10.5%, at USD 50.1 billion. In terms of services, the country exported the equivalent of USD 4.2 billion and imported USD 9.1 billion in 2024 (data WTO).

 
Foreign Trade Values 20212022202320242025
Imports of Goods (million USD) 37,46638,86842,84245,33550,100
Exports of Goods (million USD) 38,63765,71555,55549,06745,400
Imports of Services (million USD) 6,8927,9028,1769,11111,025
Exports of Services (million USD) 3,2183,5343,8274,0094,146

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20212022202320242025
Foreign Trade (in % of GDP) 46.851.243.740.139.0
Trade Balance (million USD) 1,23326,99912,7023,501n/a
Trade Balance (Including Service) (million USD) -2,44122,6308,361-1,414n/a
Imports of Goods and Services (Annual % Change) -4.5-0.216.111.917.3
Exports of Goods and Services (Annual % Change) 11.5-0.13.1-2.42.5
Imports of Goods and Services (in % of GDP) 23.420.419.920.322.1
Exports of Goods and Services (in % of GDP) 23.430.823.819.916.8

Source: World Bank ; Latest available data

Foreign Trade Forecasts 2026 (e)2027 (e)2028 (e)2029 (e)2030 (e)
Volume of exports of goods and services (Annual % change) 1.2-1.1-1.42.24.5
Volume of imports of goods and services (Annual % change) -12.91.0-0.40.61.2

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Algeria is a member of the following international economic organisations: IMF, Arab Bank for Economic Development in Africa (ABEDA), Arab Fund for Economic and Social Development (AFESD), ICC, Arab Monetary Fund (AMF), G-15, G-24, G-77, WTO (observer), Arab League, among others. For the full list of economic and other international organisations in which participates Algeria click here. International organisation membership of Algeria is also outlined here.
Free Trade Agreements
The complete and up-to-date list of Free Trade Agreements signed by Algeria can be consulted here.
 

Main Partner Countries

Main Customers
(% of Exports)		 2024
Italy 24.0%
France 14.6%
Spain 12.3%
Türkiye 6.7%
United States 5.0%
See More Countries 37.4%
Main Suppliers
(% of Imports)		 2024
China 22.3%
Italy 6.7%
France 6.6%
Brazil 6.4%
Türkiye 5.4%
See More Countries 52.6%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
President: Abdelmadjid Tebboune (since 19 December 2019)
Prime Minister: Sifi Ghrieb (since 14 September 2025)
Next Election Dates
Presidential: 2029
Council of the Nation: 2028
National People's Assembly: 2031
Main Political Parties

Following liberalisation of the electoral law in 1997, dozens of political parties entered the parliamentary sphere. Still, most political power is concentrated in the President-backed National Liberation Front (FLN).

  • National Liberation Front (FLN): left-wing, the largest party in the National People's Assembly, with after the 2 July 2026 election; previously the only legally permitted party
  • Democratic National Rally (RND): centrist, liberal; initially created by the military as an alternative party, but still remains closely aligned to the FLN
  • Future Front (FM): centrist, nationalist
  • National Construction Movement (Binaa): Islamic democracy, Algerian nationalism

The main opposition parties include:

  • Movement of the Society for Peace (MSP): Sunni Islamism, Islamic democracy, aligned with the international Muslim Brotherhood
  • Voice of the People Party (PVP): led by Lamine Osmanie, a former member of the Algerian National Front
  • Justice and Development Front (FJD): right-wing, inspired by the Turkish Justice and Development Party (AKP).
Executive Power
The President of the Republic is the Head of State. He is directly elected by direct universal suffrage by absolute majority in two rounds if needed for a 5-year term (renewable once). He appoints the Prime Minister after consultation with the majority party in the Parliament and the Government at the suggestion of the Prime Minister. The Prime Minister sets the amount of the State's expenses and revenue and prepares some bills.
Legislative Power
Parliament is bicameral and composed of the Council of the Nation (Majlis al-Umma) and the National Popular Assembly (al-Majlis al-Sha'abi al-Watani). The Council (upper house) has 174 seats, 116 members are indirectly elected in secret ballot (2/3) and 58 are appointed by the President of the Republic (1/3). Its members serve a six-year term with one-half of the membership renewed every 3 years. The Assembly (lower house) has 407 members directly elected by the population to serve 5-year terms, of which 8 are elected among Algerians living abroad.
 

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