Algeria

Algeria

snapshot_en_2.png


Algeria is the leading natural gas producer in Africa, the third largest natural gas producer in the Arab region after Qatar and Saudi Arabia, and the sixth oil producer in the Arab region. A member of the Organization of the Petroleum Exporting Countries (OPEC) since 1969, Algeria started producing oil in 1958.[1] Highly vulnerable to oil price volatility, the macroeconomic performance of Algeria faced significant challenges after the worldwide drop in oil prices since 2014. As a result, the average price for the nationally produced crude oil dropped from USD99.4 per barrel in 2014 to USD45.5 per barrel in 2016, before prices started to slightly pick up again to USD54 per barrel in 2017 reachingUSD64 in February 2019.[2]

The Algerian economy is heavily dependent on hydrocarbons that make up 96 percent of total exports,[2] a share that has been historically high in Algeria scoring above 90 percent since the mid-70s.[3] In parallel, revenues generated from the hydrocarbon sector account for 38 percent of budget revenues, down from 60 percent of revenues in 2014 prior to the drop in oil prices, and 12.5 percent of the country's GDP, compared to 20 percent in 2014.[2]

Algeria faces considerable fiscal and external imbalances. The gross government debt increased significantly since 2014 reaching 27 percent of GDP by the end of 2017 and projected to have reached 33 percent in 2018.[4] The budget deficit was estimated at 7.8 percent of GDP in 2018, down from 15.3 percent in 2015. The current account deficit reached 12 percent of GDP in 2017 and projected to decrease to 9.3 percent in 2018, reflecting the lack of adjustment of imports to the significant decrease in export revenues since 2014.[4] Imports slightly increased by 0.4 percent in 2018, whereas exports considerably improved by 15 percent.[2] Despite observed improvement, the overall current account deficit remained large, given the modest growth of the economy.[5]


Economic growth slowed down mostly due to the decline in hydrocarbon production, and sustained, yet, modest non-hydrocarbon growth of 2.2 percent. GDP growth dropped from 3.8 percent in 2014 to less than 1 percent in the third quarter of 2018,[6] while inflation increased from 5.6 percent in 2017 to 7.4 percent in 2018.[4] Overall unemployment stood at 11.7 percent by the end of 2018, but reached 26.4 percent for youth below 30 years old,[7] who make up 53 percent of Algeria’s 43 million people.[8]


The oil boom enabled Algeria to invest in infrastructure projects and improve the country’s human development indicators.[5] Life expectancy in Algeria currently amounts to 76 years compared to 70 years in 2000 while under-five mortality rates dropped from 40 per 1,000 births to 24 per 1,000 births between 2000 and 2017.[3] In addition, Algeria achieved universal primary education, with a 111.7 percent primary gross enrollment rate in 2017, while the gross enrollment ratio in tertiary education increased from 16 percent in 2000 to 48 percent in 2017 outweighing the Arab region average of 32 percent. Algeria approached gender parity at the primary level while the Gender Parity Index (GPI) at the tertiary level reached 1.5, exceeding the regional average rate of 1.1, in favor of girls.[9] Algeria has also succeeded in reducing poverty by 20 percent in the past two decades [5]; in particular extreme poverty –measured by the share of population living below $1.9 per day—was considerably reduced from 6.4 percent in 1995 to 0.5 percent according to latest statistics.[10] Nonetheless, Algeria’s official poverty rate stood at 5.5 percent in 2011 (latest available year), and about 10 percent of the population—around 4 million people—are considered vulnerable to fall back into poverty.[11] Regional disparities persist in Algeria, with almost 75 percent of the poor living in urban areas.[12]


The fall in oil prices added urgency to diversifying the economy in Algeria. According to the latest data published by the National Statistics Office in Algeria (Office National des Statistiques, ONS), industry grew by 4.5 percent in 2017 compared to 2016, exceeding both total GDP growth and non-hydrocarbons growth. The promising industries include textiles, the steel and construction materials and manufacturing industries.[6]


 

 

 

This overview was last updated in January 2019. Priority is given to the latest available official data published by national statistical offices and/or public institutions.
 


Sources:


[1] U.S. Energy Information Administration (EIA). March 25, 2019. Algeria Overview. [ONLINE] Available at: https://www.eia.gov/beta/international/analysis.php?iso=DZA [Accessed 20 February 2019]. 
[2] International Monetary Fund (IMF). 2018. Algeria: 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Algeria. [ONLINE] Available at: https://www.imf.org/en/Publications/CR/Issues/2018/06/13/Algeria-2018-Article-IV-Consultation-Press-Release-Staff-Report-and-Statement-by-the-45986 [Accessed 15 February 2019].
[3] The World Bank. 2019. World Development Indicators. [ONLINE] Available at: https://databank.worldbank.org/data/reports.aspx?source=wdi-database-archives-(beta) [Accessed 15 February 2019].
[4] International Monetary Fund (IMF). October 2018. World Economic Outlook Database. [ONLINE] Available at: https://www.imf.org/external/pubs/ft/weo/2018/02/weodata/weoselco.aspx?g=2001&sg=All+countries [Accessed 7 February 2019]. 

[5] The World Bank. 2018. Algeria Overview. [ONLINE] Available at: 
http://www.worldbank.org/en/country/algeria/overview [Accessed 11 February 2019].
[6] Office National des Statistiques (ONS). 2018. Les comptes nationaux trimestriels (N°838) -Troisième trimestre 2018. [ONLINE] Available at: http://www.ons.dz/IMG/Comptesnat3Tr2018.pdf [Accessed 15 February 2019].
[7] Office National des Statistiques (ONS). 2018. Activité, emploi & chômage en Septembre 2018 (N°840). [ONLINE] Available at: http://www.ons.dz/IMG/emploiseptembre2018.pdf [Accessed 15 February 2019].
[8] Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat. 2018. World Population Prospects. [ONLINE] Available at: https://population.un.org/wpp/ [Accessed 5 January 2019].

[9] United Nations Educational, Scientific and Cultural Organization (UNESCO). 2018. UNESCO Institute for Statistics. [ONLINE] Available at: http://data.uis.unesco.org/ [Accessed 06 February 2019].
[10] United Nations Development Programme (UNDP). 2018. Human Development Indices and Indicators: 2018 Statistical Update. Available at: http://hdr.undp.org/sites/default/files/2018_human_development_statistical_update.pdf [Accessed 18 February 2019].
[11] The World Bank. April 2018. Algeria’s Economic Outlook. [ONLINE] Available at: https://www.worldbank.org/en/country/algeria/publication/economic-outlook-april-2018 [Accessed 11 February 2019].
[12] The World Bank. October 2016. Poverty has Fallen in the Maghreb, but Inequality Persists. [ONLINE] Available at: http://www.worldbank.org/en/news/feature/2016/10/17/poverty-has-fallen-in-the-maghreb-but-inequality-persists [Accessed 11 February 2019].

 

 



view all

Data Highlighted

  • education attainment in Algeria has been on the rise, resulting in a 37% tertiary gross enrollment ratio in 2015. 

view all

Publications