Ekonomske analize


Population 44.5 million
GDP 3,659 US$
Country risk assessment
Business Climate
Change country
Compare countries
You've already selected this country.
0 country izbrano
Clear all
Add a country
Add a country
Add a country
Add a country


major macro economic indicators

  2020 2021 2022 (e) 2023 (p)
GDP growth (%) -5.1 3.5 4.5 2.6
Inflation (yearly average, %) 2.4 7.2 9.5 7.0
Budget balance (% GDP) -12.0 -7.2 -8.0 -7.0
Current account balance (% GDP) -12.9 -2.8 7.0 1.0
Public debt (% GDP) 52.3 63.0 64.0 69.0

(e): Estimate (f): Forecast


  • Large oil and gas reserves; significant potential for shale gas development
  • Potential in agriculture, renewable energy and tourism
  • Favourable geographical position, close to the European market


  • High dependence on hydrocarbon revenues
  • High youth unemployment rate, low opportunities for graduates
  • Excessive weight of the public sector
  • Acute political and social crisis triggered in 2019
  • Poor state of infrastructure
  • Bureaucratic red tape, corruption, financial sector weaknesses and uncertain business environment

RIsk AssessmenT

A constrained recovery despite high hydrocarbon prices

The Algerian economy rebounded in 2021, driven by higher energy prices and the increase in OPEC+ production quotas. In 2022, growth, which is heavily dependent on the hydrocarbon market (nearly a third of GDP and more than 93% of export earnings) will slow as the base effect weakens, while oil production could well resume its structural decline owing to under-investment in the sector. However, despite the closure of the Maghreb-Europe gas pipeline following the dispute with Morocco, strong demand from Italy and Spain is expected to result in growth in gas exports. Non-hydrocarbon exports, consisting mainly of fertilisers, mineral products, chemicals and agri-food products, including dates and sugar, will remain modest in 2022. Household consumption (45% of GDP in 2020) recovered timidly in 2021, as the government's support measures failed to sufficiently counter the erosion of household purchasing power caused by food price-driven inflation. In 2022, despite expected progress in the COVID-19 vaccination campaign, purchasing power will continue to be constrained by an unemployment rate of around 15% and stubbornly high inflation. After being put on hold in 2020, public investment, targeting the hydrocarbon, infrastructure and housing sectors, resumed in 2021. In 2022, the government is set to prioritise the mining sector (iron, phosphate), in accordance with the 2021-2023 national mining programme. However, the investment recovery will be significantly restricted by fiscal frailties, while the private share of investment will be constrained by the business environment, which continues to face challenges despite the repeal in June 2020 of the law capping foreign ownership of Algerian firms at 49% (except in strategic sectors) and new support for start-ups.


Substantial deficits and erosion of foreign exchange reserves

In 2021, the public deficit widened further as the increase in spending to support the economy was not offset by the increase in hydrocarbon revenues (45% of government revenues). In 2022, the deficit is projected to decrease on the back of the 9% increase in oil revenues forecast by the government. However, it will remain significant due to the government's substantial operational and capital expenditure and the large share of social transfers (9.5% of GDP). While public debt is rising, external debt will remain low (less than 1% of GDP), as the country is still reluctant to seek external assistance to finance its large deficit. The country is therefore expected to continue with monetary financing via the central bank, which resumed in 2021.


The current account deficit followed the trade deficit in narrowing in 2021, reflecting the sharp recovery in hydrocarbon prices and export volumes, as well as import control policies. In 2022, the current account deficit will continue to shrink, as these policies to restrict foreign purchases, mainly of machinery and food, continue to reduce the import bill. The current transfer surplus will be unchanged, preventing it from offsetting the primary income deficit linked to repatriation of foreign firms' profits. FDI will increase but remain low. The removal of the ceiling on foreign ownership of local companies will generate only a slight increase, as it excludes the most attractive sectors, such as hydrocarbons and mining. Weak investment flows and the government's refusal to take on external debt will continue to put pressure on foreign exchange reserves, which have been falling since 2014, decreasing from USD 193 billion to USD 45.5 billion in September 2021.


Persistent domestic instability, heightened tensions with Morocco

After nearly 20 years in power, President Abdelaziz Bouteflika resigned in April 2019 under pressure from regular protests, known as the Hirak movement, which began in February 2019. Despite his resignation, Hirak protests continued, but after two postponements of the presidential election, Abdelmajid Tebboune, Bouteflika's prime minister in 2017, was elected in December 2019. Against the backdrop of continuing protests and the constitutional reform approved by referendum in November 2020, legislative elections, originally scheduled for 2022, were finally held in June 2021. Like the presidential election and the constitutional referendum, they featured record abstention (77%), reflecting the population's continuing distrust of the political class. While the National Liberation Front (98 of 407 seats), the country's dominant political party since independence in 1962, came out on top in the elections, it lost more than 60 seats, while its traditional ally, the National Democratic Rally (58 seats), lost more than 40 seats. The Movement of Society for Peace (65 seats) and independents (84) made significant gains. Although demonstrations have ceased for the time being, popular discontent and the potential for political instability will persist, with increasing numbers of Hirak prisoners of conscience being put in prison, perceived corruption among political elites, and continuing difficult social and economic conditions.


Relations with Morocco have soured over Western Saharan sovereignty. After the two countries broke diplomatic ties at the end of August 2021, Algeria, Morocco's main supplier of gas, announced in October 2021 the official closure of the Maghreb-Europe gas pipeline. Also in October 2021, the country shut its airspace to French military aircraft over comments by French president Emmanuel Macron about Algeria's history.


Last updated: February 2022