Robust growth and diversification efforts earned praise for Algeria in the latest International Monetary Fund (IMF) report, which notes broadly favorable short-term prospects alongside the need to maintain structural reforms, sustain diversification, and foster private sector-led expansion.
Following the conclusion of Article IV consultations with Algeria, the report projects real Gross Domestic Product (GDP) growth at 3.8% for 2026, compared to 3.7% in 2024, anchored by strong investment momentum.
According to the IMF, non-hydrocarbon sector growth in Algeria reached 4.3% in 2025 and is set to exceed 4% in 2026, with the institution highlighting that “Algeria’s reform agenda has helped support economic diversification and reinforce growth.”
The IMF further estimated that “Algeria’s gross external debt will not exceed 1% of GDP in 2026, down from 1.1% in 2025, before gradually declining to reach 0.5% by 2031,” describing Algeria’s short-term economic horizon as broadly “positive.”
Higher hydrocarbon prices are expected to boost exports and fiscal revenues, according to the international institution, which expects GDP growth to remain resilient at 3.8% in 2026 while pointing to potential hydrocarbon market fluctuations.
The IMF also projects “a reduction in Algeria’s current account deficit in 2026, driven primarily by higher energy revenue,” providing the nation an opportunity to rebuild financial buffers. The organization commended steps taken to bolster financial stability and inclusion, emphasizing that “Algerian banking institutions maintain adequate levels of liquidity, profitability, and capital adequacy.”
For the IMF, “deeper fiscal consolidation, accelerated economic diversification, and ongoing structural reforms would improve the business climate, attract more private investment, and strengthen medium-term growth and resilience.”
The Executive Board, which endorsed the IMF staff evaluation, highlighted another positive development: Algeria’s removal from the FATF list of jurisdictions under increased monitoring.
Praising authority efforts toward diversification, the IMF indicated that thorough reforms remain necessary to back a “stronger,” more “resilient,” and private-sector-driven growth model. The report also stressed the importance of building climate change resilience and deepening trade ties across Europe and Africa, noting that upcoming consultations with Algeria will follow the standard 12-month cycle.