The International Monetary Fund (IMF) has published its annual report on the Algerian economy, giving a balanced assessment of it as a mixed bag of success and shortfalls.
While it welcomes certain measures taken by the authorities and notes an economic recovery, the international
institution highlights above all the persistent vulnerability of a model still largely dependent on oil and gas revenues.
Real GDP growth reached 3.6 percent in 2024, compared to 4.1 percent in 2023, before slowing to 3.4 percent in 2025, according to the IMF’s forecasts for Algeria. This performance, which is above the global average, nevertheless masks the fragility of an economy where the slightest variation in hydrocarbon prices leads to immediate imbalances.
The IMF notes that the 2014 price drop had already triggered a severe fiscal crisis, forcing Algiers to draw heavily on its foreign exchange reserves.
The situation remains worrying today. While foreign exchange reserves remain solid in the short term, the decline in hydrocarbon revenues, combined with a continued increase in public spending, has widened a budget deficit deemed “worrying.”
The institution warns that without “strong measures” to rationalize spending and increase non-hydrocarbon
revenues, this deficit will remain structural. It particularly emphasises the reform of energy subsidies, which weigh heavily on public finances but constitute a volatile social issue, as demonstrated by the protests of recent years.
On the monetary front, the IMF notes a decline in inflation to 4.4 percent in 2024, compared to 7.1 percent in 2023, thanks to lower food prices.
However, it warns of the persistence of risks linked to external shocks, such as the war in Ukraine or recurring droughts.
Increased flexibility in the dinar exchange rate is recommended to absorb these shocks, a policy the authorities are still hesitant to fully adopt.
The international institution acknowledges some progress, such as banking supervision efforts, the fight against money laundering, and economic diversification initiatives. However, it believes these reforms remain tentative and struggle to unleash the potential of the private sector, which is still hampered by bureaucracy and the weight of state-owned enterprises.
The IMF report implicitly warns: without deep and rapid structural reforms, Algeria risks repeating the scenario of 2014-2016, when the drop in the price of oil exposed the limitations of a hydrocarbon-dependent and under-diversified economy.
Behind the cautious praise, the message remains clear: the time for delayed adjustments is running out.
MK/ac/Sf/fss/as/APA