In 2024, Algeria’s economy showed strong growth, with non-hydrocarbon GDP expanding by 4.8% and inflation dropping significantly to 4.0%. This progress was supported by robust public investment and healthy private consumption. Despite challenging weather conditions, the agricultural sector remained resilient, helping to contain food price inflation, according to the World Bank’s latest report on the country.
Looking ahead to 2025, GDP growth is expected to moderate to 3.3%, driven primarily by the gradual recovery of the extractive sector and continued public investment. However, if international oil prices remain low, Algeria could face increased pressure on its fiscal and external balances, posing risks to economic stability.
The report also highlights that declining hydrocarbon output and rising imports have led to a modest current account deficit, a drop in international reserves, and a growing fiscal deficit. This underscores the urgent need for Algeria to accelerate its economic transformation, reduce reliance on oil and gas, and build greater resilience to future shocks.
To sustain growth, the country must focus on improving productivity, particularly in manufacturing and services, gradually shifting employment toward higher value-added sectors, and implementing fiscal reforms that boost private investment and skills development in the workforce.
Lastly, strengthening macroeconomic policy frameworks and governance, making strategic investments in human capital, and attracting foreign direct investment will be crucial for Algeria to adopt new technologies and best management practices. These steps are essential for building a more diversified and sustainable economy aligned with the country’s long-term development goals.
