## IMF Executive Board Concludes 2025 Article IV Consultation with Algeria _IMF News, September 18, 2025_ ## Source details **Canonical URL:** [IMF Executive Board Concludes 2025 Article IV Consultation with Algeria](https://www.imf.org/en/news/articles/2025/09/18/pr-25305-algeria-imf-executive-board-concludes-2025-article-iv-consultation) ## Other formats - [Markdown version](/en/news/articles/2025/09/18/pr-25305-algeria-imf-executive-board-concludes-2025-article-iv-consultation/index.md) - [Structured JSON version](/en/news/articles/2025/09/18/pr-25305-algeria-imf-executive-board-concludes-2025-article-iv-consultation/index.json) - [Bundle manifest](/en/news/articles/2025/09/18/pr-25305-algeria-imf-executive-board-concludes-2025-article-iv-consultation/bundle-manifest.json) ## Bibliographic details - Published: September 18, 2025 --- ### Near-term economic performance and outlook - Real GDP eased to 3.6 percent in 2024 from 4.1 percent in 2023. - Hydrocarbon sector contracted in 2024 due to OPEC+ cuts; nonhydrocarbon activity remained strong, supported by public investment and consumed demand. - Inflation eased significantly in 2024, largely due to lower food prices; headline inflation expected to remain moderate. - Easing of OPEC+ production cuts is expected to stabilize hydrocarbon activity, supporting 3.4 percent growth in 2025. - Risks to the outlook: declining hydrocarbon prices, global uncertainty, and potential constraints on public investment and exports that could put pressure on fiscal revenues. ### Fiscal developments, risks, and consolidation needs - Declining hydrocarbon revenues combined with increased public spending significantly widened the fiscal deficit in 2024 and depleted fiscal buffers. - Fiscal deficit profile and risks: - Double-digit fiscal deficits projected for 2025-26 risk straining the banking sector and crowding out private sector credit. - Increased risk of recourse to unconventional monetary financing schemes if vulnerabilities persist. - Absent concerted policy adjustment, large financing needs and deficits would significantly increase public debt over the medium term. - Algeria’s overall risk of sovereign stress increased to “high” based on the SR-DSA. - Fiscal consolidation requirement: - Staff analysis suggests stabilizing public debt by 2028 would require additional fiscal consolidation measures of 5 percent of GDP over 2025-28 relative to the baseline. - Recommended fiscal reforms and revenue measures: - Rationalize inefficient spending. - Boost nonhydrocarbon revenue. - Strengthen public financial and investment management. - Energy subsidy reform could yield substantial additional annual revenues over the medium-term. - Close the nonhydrocarbon tax gap, estimated at of 2-4 percent of GDP. - Advance tax policy reform guided by a Medium-Term Revenue Strategy. - Incorporate a credible financing plan in the budget to strengthen cash management. - Strengthen SOE oversight and governance to mitigate fiscal risks. ### Monetary policy and exchange rate policy - With inflation receding, the current accommodative monetary policy stance to counter tight banking sector liquidity is judged adequate. - Policy recommendations for the Bank of Algeria (BA): - Continue vigilant monitoring of banks’ liquidity and actual and expected inflation developments. - Use all available tools to attain price stability. - Refrain from any monetary financing, whether direct or indirect. - Clearly establish price stability as the primary objective of monetary policy in the MBL and identify a nominal anchor to help anchor expectations, credibility and transparency. - Exchange rate recommendations: - Enhanced exchange rate flexibility would facilitate its role as an automatic stabilizer. - Widen the BA’s official daily buy/sell nominal exchange rate band as a first step. - Prioritize measures to reduce the parallel market premium, such as increasing the foreign exchange allowance for travel. ### Financial sector and macro-financial stability - Vigilant enforcement of financial sector regulatory requirements is needed to secure macro-financial stability. - The BA has made progress in risk-based supervision, crisis management, and ensuring independent operation of supervisory entities. - Continued vigilance is critical given entrenched interlinkages between the government, SOBs, and SOEs. - Authorities have shown commitment to addressing AML-CFT deficiencies identified by FATF and should complete remaining recommendations to facilitate exit from the list of jurisdictions under enhanced monitoring. ### Structural reforms and governance - Initiatives to improve the business climate, boost private sector development, and diversify the economy are critical. - Progress noted: - 2022-23 Investment and Land Laws. - Launch of a one-stop digital platform. - New Procurement Law expected in 2025. - July 2023 national strategy to prevent and counter corruption. - June 2023 new MBL. - Creation of a centralized beneficial ownership registry. - Digitalization initiatives to enhance fiscal monitoring and revenue collection. - Further reforms needed: - Deeper product and labor market reforms to enhance flexibility and limit price distortions. - Increase transparency, especially in the hydrocarbon and SOE sectors. - Expand and strengthen regional trade amid geoeconomic fragmentation risks. ### Data, reserves, and external sector - Current account reversed to a deficit in 2024, projected to widen in 2025-26 before narrowing thereafter. - Gross official reserves (in US$ billions): 69.0 in 2023; 67.8 in 2024; projected 59.4 in 2025; 49.7 in 2026; 41.3 in 2027; 32.8 in 2028; 25.4 in 2029; 18.6 in 2030. - Gross official reserves in months of next year's imports of goods and services: 15.2 in 2023; 12.3 in 2024; 4.5 in 2025. - Exchange rate (DA per US$): 126.9 in 2020; 135.3 in 2021; 142.0 in 2022; 135.8 in 2023; 134.1 in 2024. - Crude oil export unit value (US$/bbl): 41.9 in 2020; 72.3 in 2021; 103.9 in 2022; 83.9 in 2023; 82.0 in 2024; 71.1 in 2025; 67.2 in 2026; 67.7 in 2027; 68.4 in 2028; 69.2 in 2029. ### Key macroeconomic indicators (selected, exact values) - Real GDP (annual percent change): 2020: -5.0; 2021: 3.8; 2022: 3.6; 2023: 4.1; 2024: 3.4; 2025: 2.9; 2026: 2.8; 2027: 2.7; 2028: 2.5. - Hydrocarbon sector (annual percent change): 2020: -13.9; 2021: 17.1; 2022: -0.2; 2023: -1.4; 2024: 0.1; 2025: 0.2; 2026: 1.5; 2027: 2.2; 2028: 1.6; 2029: 1.2. - Consumer price index (period average): 2020: 2.4; 2021: 7.2; 2022: 9.3; 2023: 4.0; 2024: 3.9; 2025: 3.7; 2026: 3.3. - Central government finances (percent of GDP) — Revenue: 2020: 27.0; 2021: 26.2; 2022: 29.7; 2023: 31.9; 2024: 23.2; 2025: 24.4; 2026: 22.3; 2027: 22.5; 2028: 22.1; 2029: 22.6. - Central government finances (percent of GDP) — Expenditure (incl. net lending): 2020: 37.5; 2021: 32.5; 2022: 32.7; 2023: 37.4; 2024: 37.1; 2025: 35.9; 2026: 34.7; 2027: 33.4; 2028: 32.6; 2029: 31.8. - Overall budget balance (percent of GDP): 2020: -10.5; 2021: -6.3; 2022: -3.0; 2023: -5.5; 2024: -11.5; 2025: -12.4; 2026: -10.9; 2027: -9.3. - Gross government debt (excluding guarantees) (percent of GDP): 2020: 46.0; 2021: 55.1; 2022: 48.1; 2023: 47.7; 2024: 48.5; 2025: 52.5; 2026: 61.1; 2027: 67.3; 2028: 72.8; 2029: 76.6; 2030: 80.6. - Current account balance (percent of GDP) — Exports, f.o.b. (percent of GDP): 2020: 13.3; 2021: 20.8; 2022: 22.4; 2023: 18.4; 2024: 16.1; 2025: 15.7; 2026: 16.3; 2027: 16.6; 2028: 17.7; 2029: 18.5. - Gross external debt (percent of GDP): 2020: 1.1; 2021: 1.0; 2022: 0.8; 2023: 0.7; 2024: 0.6. *Source: IMF press release, September 18, 2025.* --- ## References - [PRESS CENTER](http://presscenter.imf.org/) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2025/09/18/pr-25305-algeria-imf-executive-board-concludes-2025-article-iv-consultation_