The International Monetary Fund (IMF) has projected that Algeria's economy will grow by 3.8% in 2026, after a growth rate of 3.9% in 2025 and 3.7% in 2024. The IMF attributed the growth to a strong investment and a diversified economy. The fund also noted that Algeria's economy has shown resilience, driven by a strategy focused on public investment.
The IMF praised Algeria's efforts to diversify its economy, citing progress in reducing the country's reliance on hydrocarbons. The fund also welcomed Algeria's exit from the Financial Action Task Force's (FATF) grey list of countries subject to enhanced surveillance. The IMF's assessment was made after the conclusion of its Article IV consultation with Algeria, which took place on September 11.
The IMF report noted that Algeria's economic growth has been driven by a strong investment, particularly in the non-hydrocarbon sector, which is expected to grow by 4% in 2026. The fund also projected that the hydrocarbon sector will grow by 2.7% in 2026. The IMF's projections are based on an expected increase in oil prices, which will support export revenues and public finances.
The IMF also highlighted the importance of continuing structural reforms to improve the business climate and promote private sector growth. The fund recommended that Algeria deepen its trade and energy links with Europe and Africa, and build greater resilience to climate change. The IMF also emphasized the need for Algeria to continue implementing reforms to improve governance and transparency.
The IMF report also noted that Algeria's banking sector remains stable, with adequate levels of liquidity, profitability, and capitalization. However, the fund recommended that Algeria continue to strengthen its banking sector, including by enhancing banking supervision and crisis management. The IMF also welcomed Algeria's efforts to promote financial inclusion and stability.
The IMF projected that Algeria's current account deficit will narrow in 2026, driven by higher oil prices and lower imports. The fund also noted that Algeria's fiscal position is expected to improve, driven by higher hydrocarbon revenues. However, the IMF warned that Algeria still faces challenges, including a high fiscal deficit and inflationary pressures.
The IMF concluded that Algeria's economic outlook is positive, driven by a diversified economy and a strong investment. The fund recommended that Algeria continue to implement structural reforms to promote private sector growth and improve governance. The IMF also emphasized the importance of continuing to strengthen Algeria's economic resilience and promoting sustainable growth.
Key points
- Algeria's economy is expected to grow 3.8% in 2026, driven by a strong investment and a diversified economy.
- The IMF welcomed Algeria's exit from the FATF's grey list of countries subject to enhanced surveillance.
- The IMF recommended that Algeria continue to implement structural reforms to promote private sector growth and improve governance.
