In-Depth Analysis
Algeria
The Algerian economy relies on hydrocarbon exports and state-centred economic management. The Covid-19-induced slump in global oil and gas demand has prompted aggressive oil production cuts. This coupled with low global oil and gas prices has worsened the economy’s outlook. Authorities plan to diversify the economy and boost manufacturing and other sectors, but such restructuring can take decades to implement.
We forecast the oil-dependent country’s economy to grow by 3.3% this year thanks to a recovery in global demand together with higher hydrocarbon prices, especially that of LNG, of which Algeria is a major supplier to European countries. The government has set out to discover new oil and gas fields as it hopes to utilise and benefit from every drop available to it. The recovery in hydrocarbon production, together with elevated prices, leads us to forecast a current account surplus equivalent to 9.5% of GDP for 2021. That said, poor and deteriorating infrastructure and a lack of economic freedom keep economic structure risk high. At the same time, the systematic depletion of foreign reserves and the government’s refusal to accept foreign financial aid have increased liquidity risk. (Source: Algeria Annual Country Profile, published October 2021.)
Macroeconomic Data
(2020)
Fiscal Balance (as a % of GDP)
Consumer Price Index (% change y-o-y, avg)
Current Account Balance (as a % of GDP)
Real GDP (annual % change)
GDP per Capita, US$
Import Cover (months)
Population, million
Total External Debt (as a % of GDP)
-9.1
2.1
-12.3
-4.9
3,368.0
13.84
43.9
3.5