Algeria’s economy is growing, but the IMF says large fiscal deficits, shrinking buffers, and continued dependence on hydrocarbons are creating pressures that could complicate the country’s medium-term outlook.
Algeria’s economic growth remains relatively strong, but the latest assessment by the International Monetary Fund points to a growing gap between headline economic performance and underlying fiscal and external resilience.
In its 2026 Article IV consultation, concluded in September, the IMF estimated that Algeria’s economy grew by 3.9 percent in 2025, compared with 3.7 percent in 2024, and projected growth of 3.8 percent in 2026.
Strong investment has been a major driver of growth. At the same time, however, inflation has increased, the fiscal deficit remains large, and the country has experienced a sharp deterioration in its external position.
The result is an economy that is expanding while simultaneously losing some of the financial buffers that would normally help it absorb future shocks.
Algeria’s fiscal deficit narrowed in 2025 but remained substantial at 10.5 percent of GDP, compared with 14 percent in 2024.
The IMF notes that the improvement was partly supported by one-off dividend payments from state-owned enterprises and the Bank of Algeria. With the country’s fiscal savings fund depleted, continued financing needs pushed government debt to 52.1 percent of GDP in 2025.
Continue reading with Eandel
Subscribe to unlock the complete story and receive your subscriber benefits.
