Algeria: 2025 Article IV Consultation-Press Release; and Staff Report

Since the pandemic, the Algerian economy has rebounded, driven by high hydrocarbon prices and public spending, especially ahead of the 2024 presidential election. Nonetheless, the economy remains vulnerable to its overreliance on hydrocarbons, exposing public finances to global price volatility. President Tebboune’s re-election in 2024 signals continued fiscal expansion to support households and investment, aligned with the 2021 Government Action Plan’s goals of diversification and sustainability. However, Algeria’s state-led, hydrocarbon-dependent model creates economic distortions that constrain private sector growth and job creation. Long-term resilience and inclusive growth will require deep structural reforms to shift toward a more open, private-sector-driven economy. Recent efforts to diversify and attract investment are positive steps, but realizing Algeria’s potential will require bold action to address governance, competitiveness, and fiscal sustainability challenges.