Estudios Económicos


Population 41.5 million
GDP 4,034 US$
Country risk assessment
Business Climate
Change country
Compare countries
You've already selected this country.
0 country seleccionado
Clear all
Add a country
Add a country
Add a country
Add a country


major macro economic indicators

  2016 2017 2018 (e) 2019 (f)
GDP growth (%) 3.3 1.6 1.6 1.9
Inflation (yearly average, %) 6.4 5.5 6.5 6.7
Budget balance (% GDP) -13.6 -9.0 -6.9 -5.8
Current account balance (% GDP) -16.7 -12.8 -8.8 -7.2
Public debt (% GDP) 29.3 23.9 31.3 34.9


(e): Estimate. (f): Forecast.


  • Significant oil and gas reserves
  • Renewable energy and tourism potential
  • Strong external financial position (very low external debt, large foreign exchange reserves)


  • High dependence on hydrocarbons and problems in using this income
  • Fault lines separating those in power from the people
  • High youth unemployment rate
  • Overly large public sector
  • Red tape, financial sector weaknesses and problematic business environment

RIsk AssessmenT

Moderate growth to continue in 2019

Higher oil prices allowed the Algerian economy to recover in 2018. Revenues from hydrocarbon exports, which represent 93% of exported volumes, have risen, easing the pressure on budget revenues and allowing the government to keep providing support to activity. However, export volumes shrank over the year due to the decline in production, which remains hobbled by the lack of investment and the maturity of the fields. To meet these challenges, the government is expected to put in place a new oil law that will be effective in 2019, aimed at attracting foreign investment. The second proposed course of action is to diversify production sources and methods with the development of offshore activities and the exploitation of non-conventional hydrocarbons. Sonatrach, an Algerian SOE formed to develop the country’s hydrocarbon resources, has announced that shale gas drilling is expected to begin in 2019, which should give the sector a new lease of life. Despite a favourable oil market for hydrocarbon exporters, Algeria’s economic activity is set to slow slightly in 2019. The government should have additional budgetary leeway, but on the eve of the 2019 presidential elections, this is expected to be put towards social measures. Social transfers are thus expected to increase, which should support household consumption, but public investment spending will slow. The economic slowdown outside the hydrocarbon industry, especially in sectors that are heavily reliant on public spending, coupled with an unfavourable business climate will be a drag on private investment. Inflation is expected to stabilise, but at a high level. The non-conventional financing policy (including the use of monetary creation) put in place in September 2017 will be continued to meet the government’s financing needs.

Substantial twin deficits

Despite the government's expansionary fiscal policy, the improvement in the oil market led to a slight reduction in the government deficit in 2018. This trend is expected to continue in 2019 but the deficit remains significant. The Finance Act, which is based on a relatively conservative oil price forecast of USD 50, anticipates a slight increase in government revenues. Fiscal revenues should also benefit from the depreciation of the Algerian dinar, whose administered exchange rate is estimated to be DZD 118 per USD 1, compared with DZD 115 per USD 1 in 2018. The government does not plan to introduce new taxes and duties, and the budget allocated to subsidies, which represents 8% of GDP, will probably remain unchanged. Recurrent expenditure and social transfers (especially those in support of families) are expected to increase at the expense of capital expenditure. As in 2018, the government deficit will likely be financed directly by borrowing from the central bank. Public debt will increase accordingly, but will remain predominantly domestic. For the time being, the public authorities are ruling out the use of external debt.

The current account deficit narrowed significantly in 2018. Import control measures combined with an upturn in export earnings have led to a decline in the large trade deficit, which is expected to continue in 2019 despite a slight increase in imports. The import bans on a list of 851 products were replaced in September 2018 by a new tariff system. The provisional additional safeguard duty (DAPS), which will probably continue to be applied in 2019, sets additional customs duties ranging from 30% to 200% on a product list drawn up by an inter-ministerial commission. Foreign exchange reserves, which were equivalent to 16 months of imports in 2018, continue to shrink, but at a slower pace. Inward FDI should nevertheless increase, notably thanks to the new law on investment in the oil sector.

Presidential elections in 2019

Campaigning for the presidential elections in April 2019 appeared to already be underway in 2018, although the political status quo does not look to be under threat. While he has yet to reveal his intentions, and despite poor health, President Abdelaziz Bouteflika will likely run for a fifth term. He will continue to be supported by a large swathe of the political class, which is calling for him to stand for re-election. Backers include his party, the Front de libération nationale (FLN, formerly the sole party), and its main allies: the Rassemblement national démocratique (RND), the Islamist Rassemblement de l'espoir de l'Algérie (TAJ) party, and the UGTA trade union. For now, the current head of state does not seem to have any opposition, but Algeria's period of slow growth is beginning to have social repercussions. Despite the implementation of a distributive policy at the expense of fiscal consolidation, protests are on the rise.


Last update: February 2019

Parte superior
  • Spanish