Algeria's economy experienced significant growth in 2024, with non-hydrocarbon GDP increasing by 4.8%, according to the World Bank's Spring 2025 Economic Update. This growth was supported by strong public investment and household consumption. Inflation decreased to 4.0% in 2024, aided by a strong agricultural sector performance despite limited rainfall.
The report projects real GDP growth to moderate to 3.3% in 2025 as extractive sectors recover and public investment consolidates. However, low global oil prices could lead to expanding external and fiscal deficits.
A decline in hydrocarbon output and rising imports resulted in a modest current account deficit, reduced foreign exchange reserves, and a widening fiscal deficit.
"Algeria’s growth path continues to be solid. However, the fiscal and external balance remain highly sensitive to oil and gas prices," said Kamel Braham, World Bank Resident Representative for Algeria. "Accelerating structural transformation is essential to build resilience and support sustainable growth."
The report outlines priorities for long-term growth, emphasizing the need for enhanced productivity and employment shifts toward higher value-added sectors. This would reduce reliance on public spending and hydrocarbons while making the economy more adaptable.
"Productivity gains, particularly in manufacturing and services, are essential to unlock Algeria’s growth potential," noted Cyril Desponts, Senior Economist for Algeria. "A shift toward higher-value-added sectors, supported by a progressive fiscal rebalancing, targeted reforms to boost private investment, and a skill development strategy will be key to building a more resilient economy."
To achieve sustained economic acceleration, strengthening macroeconomic policy frameworks and governance is crucial. Strategic investments in human capital and promoting foreign investment are also necessary for transferring productive technologies across the economy.