Algeria: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Algeria

The Algerian economy was still emerging from the Covid pandemic when it was hit by spillovers from Russia’s war in Ukraine and by recurrent droughts. These shocks fueled inflation while high international hydrocarbon prices also boosted government revenue and exports. Algeria’s economy likely recorded a robust growth in 2023 and the external position remained solid, with a current account surplus for the second year in a row and further accumulation of international reserves. Inflation remains elevated and could become entrenched. The 2023–24 budgets aim at supporting the purchasing power of households but risk depleting the buffers that protect the budget from revenue volatility. Structural reforms are advancing with the enactment of the Monetary and Banking law and the implementation of program budgeting and the 2022 Investment Law. Investment in digitalization would strengthen governance and transparency, reduce corruption risks, and improve service delivery.