IMF Executive Board Concludes 2026 Article IV Consultation with Algeria
IMF News, September 21, 2026
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Bibliographic details
- Published: September 21, 2026
Main findings
- Algeria’s reform program has supported diversification and robust growth, although large fiscal deficits have depleted fiscal buffers and external buffers have eroded.
- Robust growth in 2025 was accompanied by higher inflation and large fiscal and current account deficits.
- Real GDP growth is estimated at 3.9 percent in 2025 (from 3.7 percent in 2024) supported by strong investment.
- Headline inflation rose from -2.0 percent in September 2025 to 5.2 percent in April 2026, as food-price deflation ended and jewelry prices increased sharply with higher gold prices.
- Fiscal deficit narrowed in 2025, supported by large one-off dividend payments from SOEs and the Bank of Algeria, but remained very large; fiscal buffers are depleted and public debt and reliance on central-bank financing increased.
- Current account deficit widened sharply as imports surged and hydrocarbon exports declined, leading to large reserve losses.
- Monetary conditions eased alongside increased central bank financing of the government and the parallel exchange rate premium widened further.
- Near-term prospects: higher hydrocarbon revenue improves the near-term outlook and provides an opportunity to rebuild buffers; GDP growth projected at 3.8 percent in 2026 with temporary increase in inflation.
- Medium-term risks: continued large fiscal deficits would raise public debt and persistent current-account deficits would further reduce reserves.
Executive Board assessment and policy recommendations
- Directors endorsed staff’s appraisal and welcomed robust growth and diversification efforts supported by a public investment–led strategy.
- Fiscal policy
- Call for credible and gradual fiscal consolidation given significant fiscal sustainability risks from large deficits.
- Use current hydrocarbon windfall to rebuild fiscal buffers.
- Strengthen nonhydrocarbon revenue mobilization.
- Improve public investment efficiency and rationalize expenditure, including gradual energy subsidy reform with targeted support for vulnerable households.
- Continue progress on public financial management and fiscal risk management anchored in a rules-based framework.
- Monetary and exchange rate policy
- Tighten monetary policy if broader inflationary pressures intensify.
- Enhance the monetary policy framework by establishing low inflation as a clear nominal anchor and improving monetary policy transmission.
- Reinforce Bank of Algeria’s operational independence and limit monetary financing to exceptional circumstances.
- Increase exchange rate flexibility to strengthen external shock absorption and reduce the parallel market exchange rate premium.
- Financial sector and governance
- Continue reforms to contain risks from high NPLs and sovereign–SOE–bank linkages.
- Strengthen supervision, crisis and liquidity management, and public bank governance.
- Continue effective implementation of the strengthened AML/CFT framework after removal from the FATF list of jurisdictions under increased monitoring.
- Address outstanding FSAP recommendations.
- Structural reforms for diversification and private sector development
- Deepen reforms to improve business climate, level playing field between SOEs and private sector, reduce regulatory barriers and informality, and strengthen governance and transparency.
- Build climate resilience and deepen trade and energy linkages with Europe and Africa.
- Improve data coverage, timeliness, and quality.
- Engagement
- Strong engagement through Fund capacity development and technical assistance remains important.
- Timing
- The next Article IV consultation is expected on the standard 12-month cycle.
Key downside and upside scenarios
- Downside risks
- Sharp decline in hydrocarbon prices.
- Continued large fiscal deficits that could jeopardize debt sustainability and intensify sovereign–bank linkages.
- Continued reliance on monetary financing, undermining price stability and policy credibility.
- Upside potential
- Stronger fiscal consolidation, faster diversification, and continued structural reforms could improve business climate, attract private investment, and strengthen medium-term growth and resilience.
Selected economic and financial indicators (highlights, 2023–31)
- Output and prices (annual percentage change)
- Real GDP: 2023 = 4.1; 2024 = 3.7; 2025 = 3.9; 2026 = 3.8; 2027 = 3.1; 2028 = 3.0; 2029 = 2.9
- Hydrocarbon sector: 2023 = 3.6; 2024 = -1.3; 2025 = 1.3; 2026 = 2.7; 2027 = -0.8; 2028 = -0.1; 2029 = 3.4; 2030 = 1.2
- Nonhydrocarbon sector: 2023 = 4.2; 2024 = 4.3; 2025 = 4.0; 2026 = 3.3
- Consumer price index (period average): 2023 = 9.3; 2024 = 1.4; 2025 = 5.5; 2026 = 3.5
- Money and credit (annual percentage change unless otherwise indicated)
- Net foreign assets: 2023 = 8.9; 2024 = 19.4; 2025 = -14.5; 2026 = -6.2; 2027 = -3.2; 2028 = -8.6; 2029 = -7.2; 2030 = -5.9; 2031 = -5.8
- Credit to the economy: 2023 = 6.0; 2024 = 5.9; 2025 = 7.8; 2026 = 9.6; 2027 = 6.7; 2028 = 6.6; 2029 = 6.5; 2030 = 6.3
- Money and quasi-money: 2023 = 9.0; 2024 = 6.9; 2025 = 11.5; 2026 = 9.5; 2027 = 9.4; 2028 = 8.8
- Central government finances (in percent of GDP)
- Revenue: 2023 = 31.9; 2024 = 23.8; 2025 = 26.3; 2026 = 25.4; 2027 = 23.9; 2028 = 22.8; 2029 = 23.3; 2030 = 23.4; 2031 = 23.4
- Expenditure (incl. net lending): 2023 = 37.4; 2024 = 37.8; 2025 = 36.8; 2026 = 35.0; 2027 = 34.1; 2028 = 32.8; 2029 = 32.3; 2030 = 32.2; 2031 = 32.1
- Overall budget balance: 2023 = -5.5; 2024 = -14.0; 2025 = -10.5; 2026 = -9.6; 2027 = -10.2; 2028 = -10.0; 2029 = -9.0; 2030 = -8.7
- Central bank financing (flow): 2023 = -0.7; 2024 = -1.1; 2025 = -1.4; 2026 = -0.4; 2027 = 0.0
- Gross government debt (excluding guarantees): 2023 = 47.7; 2024 = 48.1; 2025 = 52.1; 2026 = 53.2; 2027 = 60.4; 2028 = 66.4; 2029 = 71.2; 2030 = 75.4; 2031 = 79.0
- External sector
- Current account balance (percent of GDP): 2023 = -8.9; 2024 = -1.9; 2025 = -2.5; 2026 = -3.1; 2027 = -2.6; 2028 = -2.2; 2029 = -2.0
- Exports, f.o.b. (percent of GDP): 2023 = 22.4; 2024 = 18.1; 2025 = 16.6; 2026 = 16.4; 2027 = 17.0
- Imports, f.o.b. (percent of GDP): 2023 = 17.3; 2024 = 21.9; 2025 = 18.5
- Gross official reserves (US$ billions): 2023 = 70.6; 2024 = 68.9; 2025 = 51.0; 2026 = 46.5; 2027 = 41.0; 2028 = 27.8; 2029 = 23.5; 2030 = 19.8
- Reserves in months of next year's imports of goods and services: 2023 = 15.6; 2024 = 11.1; 2025 = 8.6; 2026 = 8.1; 2027 = 7.2; 2028 = 5.8; 2029 = 4.8
- Gross external debt (percent of GDP): 2023 = 1.1; 2024 = 1.0; 2025 = 0.8; 2026 = 0.7; 2027 = 0.6; 2028 = 0.5
- Memorandum items
- GDP (in billions of dinars at current prices): 2023 = 33,679; 2024 = 36,104; 2025 = 37,389; 2026 = 43,024; 2027 = 45,041; 2028 = 47,662; 2029 = 50,446; 2030 = 53,383; 2031 = 56,830
- NHGDP (in billions of dinars at current prices): 2023 = 27,243; 2024 = 29,971; 2025 = 31,965; 2026 = 35,407; 2027 = 38,351; 2028 = 40,943; 2029 = 43,626; 2030 = 46,575; 2031 = 49,728
- GDP per capita (in US$): 2023 = 5,353; 2024 = 5,749; 2025 = 5,997; 2026 = 6,733; 2027 = 6,979; 2028 = 6,879; 2029 = 6,846; 2030 = 6,831; 2031 = 6,860
- Exchange rate (DA per US$): 2023 = 135.8; 2024 = 134.1
- Crude oil export unit value (US$/bbl): 2023 = 83.9; 2024 = 82.0; 2025 = 69.4; 2026 = 92.6; 2027 = 82.4; 2028 = 77.7; 2029 = 75.2; 2030 = 73.3; 2031 = 71.8
Press Release No. 26/290, September 21, 2026.