Algeria is a North African country with a land mass of 2.38 million km² and a 1,600km coastline on the Mediterranean between Morocco and Tunisia. It has a GDP of US$163bn and a population of 44 million of which just over 500,000 are in diaspora in France, which was its colonial ruler.
The economy is underpinned by deposits of fossil fuels and the manufacture of petroleum. Hydrocarbon production and export revenues are central in the country's economy and accounted for 19% of GDP, 93% of product exports and 38% of budget revenues between 2016 and 2021. Algeria aspires to diversify its economy to vary its sources of revenues and improve employment prospects, particularly for young people, given the country's demographic profile, with an unemployment rate in 2021 of 12.7% of the total labour force and 31.9% among young people (aged 15 to 24). The stock exchange, founded in 1997, has five listings.
Real GDP growth climbed to 3.0% in 2022 from 3.4% in 2021, stimulated by the rebound in oil prices. Inflation rose to 9.3% from 7.2% due to global inflation. The budget deficit fell to 0.2% of GDP from 6.9%, while budgetary revenue rose, especially revenue related to the oil sector. The current account swung to a surplus of 7.8% of GDP from a deficit of 2.8% due to the higher volume and value of oil exports as well as import compression measures.
Real GDP growth is projected to reach 3.1% in 2023 before dropping to 2.1% in 2024. While crude oil prices are expected to remain high, capacity to expand production could be limited in the short term. As a result, growth may decline due to the lack of an explicit economic diversification policy and constraints on the capacity to expand natural gas production in the short term. Inflation is projected to decline to 7.7% in 2023 and 6.7% in 2024.
In the past two decades, the hydrocarbon boom has allowed Algeria to make advances in economic and human development. Algeria is considered to have achieved universal primary education with a 97% primary net enrolment rate in 2015 and increasing higher education enrolment rates.
Sources: Who Owns Whom sector reports, CIA Factbook, African Development Bank, World Bank, Trading Economics, African Statistical Yearbook and IMF.