Algeria: 2025 Article IV Consultation-Press Release; and Staff Report

The 2025 Article IV Consultation highlights that Algeria’s economic prospects for the near term are broadly positive but clouded by growing fiscal vulnerabilities. The 2024 fiscal impulse supported growth into 2025 but, alongside falling hydrocarbon prices, led to a wider fiscal deficit and depleted fiscal buffers. Long-term resilience and inclusive growth will require deep structural reforms to shift toward a more open, private-sector-driven economy. Recent efforts to diversify and attract investment are positive steps, but realizing Algeria’s potential will require bold action to address governance, competitiveness, and fiscal sustainability challenges. Algeria’s near-term outlook remains broadly positive but clouded by the need for significant policy adjustment amid declining hydrocarbon prices and widening fiscal deficits. Unlocking Algeria’s growth potential would require broad reforms to facilitate private sector development. Deep product and labor market reforms to reduce restrictions and level the playing field between state-owned enterprises and private entities would help increase competition and innovation, and support diversification efforts.